Tue, May 07, 2024 at 17:05

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  Joy

  • Hey Annie!

  • Have you heard about the recent lawsuit against Coinbase?

  • Apparently, they've been hit with a class-action complaint alleging that they violated US securities laws.😲

  • 
• Annie

  • What?

  • Coinbase?😮 That's one of the biggest crypto exchanges in the US, isn't it?

  
• 

  Joy

  • Exactly!

  • The complaint was filed in San Francisco and claims that Coinbase has been operating as part of a shadowy crypto ecosystem, just outside of the law.

  • 

  • They're accused of offering unregistered digital asset securities like Solana, NEAR Protocol, Algorand, Stellar, Tezos, Polygon, Uniswap and Decentraland.😱

• Annie

  • Wow!

  • That's quite a list of cryptocurrencies.🤔 But what does it mean for a digital asset to be 'unregistered'?

  
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• 

  Joy

  • Good question!

  • In simple terms, an 'unregistered' security is one that hasn't been registered with the Securities and Exchange Commission (SEC).

  • This is a big deal because it's a violation of securities laws.😓

  • 
• Annie

  • I see...

  • So, this isn't the first time Coinbase has been accused of violating securities laws, right?

  
• 

  Joy

  • Bingo!

  • You're right.

  • The SEC actually launched a lawsuit against Coinbase for similar reasons back in June 2023.😬

• Annie

  • Oh my...

  • But how is Coinbase defending itself against these allegations?🧐

  
• 

  Joy

  • Well, Coinbase argues that trading digital assets doesn't qualify as an 'investment contract' under the Howey Test.

  • This is a test created by the Supreme Court more than 90 years ago to determine whether assets should be classified as securities.🤓

• Annie

  • Hmm...

  • Interesting.

  • But, is this news good or bad for the market?🤷‍♀️

  
• 

  Joy

  • Well, it's definitely not good news.

  • If Coinbase is found guilty, it could lead to a lot of uncertainty and instability in the crypto market.

  • 

  • Plus, it might make investors think twice before investing in digital assets.😔

  • To sum up, this article is considered a 😱Bearish for investors!!