Coinbase Wins Partial Victory in Manhattan Lawsuit Over Digital-Asset Securities

Coinbase, one of the largest cryptocurrency exchanges, has won a significant but partial victory in a long-running lawsuit over whether it sold unregistered digital-asset securities. A Manhattan federal judge dismissed claims tied to most customer trades while leaving the company exposed on a narrower slice of transactions filled from its own inventory.

The distinction between matched and inventory transactions is key: an estimated 99.97% of trading volume came from orders matched between users, with the remaining trades filled from operational inventory in limited circumstances such as platform disruptions or orders below minimum trade sizes.

The case centers on Section 12(a)(1) of the Securities Act, which can impose liability on a party that directly passes title to a security or successfully solicits its purchase for financial benefit. The judge's ruling treats Coinbase as a statutory seller for those inventory transactions, creating a potential path for customers to pursue claims tied to that activity.