Coinbase is facing a potential class-action lawsuit for misleading investors with unsubstantiated and materially deceiving offering statements.
The leading exchange platform was also sued recently for misleading customers into purchasing Dogecoin in exchange for a sweepstakes reward.
Coinbase is facing a proposed securities class action as its offerings are claimed to be false and misleading. According to one shareholder Donald Ramsey, since the company’s mid-April debut, its stock price has only been falling.
Allegedly, at the time of its direct listing on NASDAQ, Coinbase failed to clarify that it needed a “sizable cash injection.” More so, the platform did not reveal its susceptibility to service-level interference. The latter, as Ramsey claims, was “increasingly likely to occur as the company scaled its services to a larger user base.”
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Additionally, since April 14, Coinbase stock price has been falling from an opening price of $381 per share to just $208. Stock dips came about as investors got wind of the unsubstantiated and materially deceiving Coinbase’s offering statements.
Coinbase class-action lawsuit
Essentially, Ramsey represents those who purchased Coinbase Class A common stock on or around the time the company went public. The class potentially consists of thousands of individuals and entities.
Back on April 14, Coinbase decided to resell up to 114,850,769 shares of its Class A common stock by registered shareholders. At the time, the company said in its registration statement that the resale was not underwritten by an investment bank. Additionally, the registered shareholders would purportedly elect should they wish to sell their shares, Ramsey said.
Such sales, if any, would be brokerage transactions of the NASDAQ Global Select Market, and Coinbase would purportedly not receive any proceeds from the sale of the shares Class A common stock by the registered stockholders,
Allegedly, this meant that company funds came from operational cash-flows and net profits from the sale of convertible preferred stock.
According to the suit, the exchange claims to empower “the crypto-economy”. The exchange also touts itself as a “trusted platform” for transacting Bitcoin and other digital currencies. Quoting the company’s statements, Ramsey said Coinbase affirms its provision of “trusted and easy-to-use products.” These products “support the global, real-time and 24/7/365 demands of crypto-asset markets”, thereby drawing in users.
However, come mid-May, Ramsey says “the high-flying promise of Coinbase came to a screaming halt.” The firm announced to investors a bond sale to raise $1.15 billion, on May 17. However, two days later, it disclosed having technical challenges due to supposed network congestion.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages,” Ramsey added.
The case, Donald Ramsey v. Coinbase Global Inc., is now the latest class action suit against Coinbase. Recently, one user sued the company for a misleading email advertisement. The user claims Coinbase hoodwinked him and other users to acquire Dogecoin in hopes of winning a sweepstakes reward.
Der Beitrag Coinbase slapped with a class action lawsuit for ‘misleading’ investors erschien zuerst auf Crypto News Flash.