Coinbase Wins Big as Judge Tosses Most Claims in Securities Lawsuit

Coinbase has emerged victorious in much of a lawsuit filed by customers who accused the largest US cryptocurrency exchange of selling unregistered securities. The lawsuit, which began in 2021, claimed that Coinbase sold over 60 tokens, including XRP and dogecoin, without registering as an exchange or broker-dealer.

U.S. District Judge Paul Engelmayer in Manhattan dismissed all claims based on 'matched' transactions, where Coinbase paired customers' buy and sell orders, which accounted for an estimated 99.97% of trading volume - a staggering $300 billion in sales.

The judge found that Coinbase was not a statutory seller for these transactions because it did not pass ownership of tokens to buyers, merely providing basic overviews of tokens and their price histories.

However, Engelmayer ruled that Coinbase was a statutory seller for 'inventory' transactions, where it filled orders from tokens it owned, which accounted for the remaining 0.03% of trading volume - at least $178 million in sales.