Coinbase faces class-action lawsuit over alleged misleading shareholders, leading to 12% stock drop

From Nasdaq
September 6, 2024 11:37:23 am:

A U.S. federal judge has ruled that Coinbase must face a class-action lawsuit by shareholders accusing the exchange of misleading them about potential SEC regulatory actions. The lawsuit includes claims of downplaying risks, leading to a 12% stock price drop. Shareholders also allege improper disclosure of bankruptcy risks. Coinbase plans to continue defending itself.

The class-action lawsuit covers shareholders from April 2021 to June 2023, with claims about potential bankruptcy risks and asset loss allowed to proceed. Some allegations were dismissed, including claims about proprietary trading. Coinbase’s defense strategy may set a precedent for how crypto companies handle regulatory risks in a volatile market.

Led by the Swedish pension fund Sjunde AP-Fonden, the lawsuit represents a crucial period in Coinbase’s growth. The case highlights increased regulatory scrutiny on crypto exchanges, with potential broader implications for the industry. Investors are closely watching how Coinbase navigates the legal battle and regulatory challenges ahead.

Read more at Nasdaq: Coinbase’s Legal Battle with Shareholders Over SEC Action Continues