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5h ago

Judge Lets Narrowed Coinbase Shareholder Fraud Case Proceed

Only statements tied to specific defendants survive under the judge’s pleading standard.

A representation of the cryptocurrency is seen in front of Coinbase logo in this illustration taken, March 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Overview

  • U.S. District Judge Brian Martinotti in New Jersey rejected a full dismissal, allowing parts of the securities-fraud suit against Coinbase, executives and directors to move forward.
  • The court barred claims based solely on group pleading and said only defendant-specific allegations with particularized facts can continue.
  • The decision stems from shareholder claims that Coinbase downplayed SEC enforcement risk and misrepresented potential asset-loss exposure in a bankruptcy.
  • The proposed class, led by Swedish pension fund Sjunde AP-Fonden, covers investors from April 14, 2021 to June 5, 2023.
  • The SEC’s separate enforcement case against Coinbase, filed in June 2023, was ended in February 2025 as regulatory priorities shifted, and Coinbase said it will vigorously defend the remaining shareholder claims.