Case Against Coinbase Seeks Recognition that Bitcoin Should be Regulated as a “Security”
A group of investors filed a civil complaint today against Coinbase, Inc. in New York State Supreme Court alleging that Coinbase failed to adequately safeguard customer assets and misrepresented the nature of Bitcoin as a financial instrument. The complaint seeks $20 million in damages. The plaintiffs, represented by MDF Law PLLC and Coin Counsel, include actress Cynthia Garrett. MDF Law also represents Dr. Henry Gonzalez, a physician who lost $3.5 million in crypto after he was socially engineered with personal confidential information that was stolen from Coinbase.
The complaint against Coinbase, filed in New York State Supreme Court, seeks judicial clarification on whether Bitcoin qualifies as a “security” under a test established by the U.S. Supreme Court in SEC v. Howey. Simultaneously, each of the Plaintiffs have filed individual arbitration cases against Coinbase. The arbitration cases against Coinbase seek damages related to Coinbase’s failure to reimburse victims under the Electronic Funds Transfer Act.