Amid the SEC’s lawsuit against Ripple, a California resident has sued Coinbase. He accuses the site of making a profit from the sale of XRP as a security.
In his lawsuit, Thomas Sandoval emphasizes that Coinbase sold XRP cryptocurrency in the knowledge that the coin is a security, and this is a violation of California’s fair competition law. The law protects consumers from fraudulent advertising and fraudulent business practices.
According to the plaintiff, the exchange’s management should have known that XRP was recognized as a security, since the management knew that all the nodes of the network were under the control of Ripple.
New one count California federal court lawsuit alleges Coinbase violated state unfair competition laws by selling XRP, alleged to be an unregistered security, and taking commissions from the sale. pic.twitter.com/BpMZO1ulcC
— Palley (@stephendpalley) December 30, 2020
Anderson Kill’s partner Stephen Palley, the lawsuit lacks sufficient evidence and does not pose a serious threat to Coinbase. However, he may become the first of a whole galaxy of such proceedings.
On December 31, the suspension of trading with XRP was announced by the American division of the largest cryptocurrency exchange Binance. Now there is only one major exchange left on the US market that has not introduced restrictions on trading in pairs with XRP – Kraken.
Recall that on December 23, the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, accusing it of carrying out an illegal sale of securities, which were XRP coins. Since then, a significant number of platforms have limited XRP trading for Americans, including Coinbase.