Coinbase Shareholder Lawsuit Approved Over Alleged Legal Risk Hiding
A federal judge has given the green light to a lawsuit against Coinbase, alleging the cryptocurrency exchange misled shareholders about potential legal troubles. The lawsuit, which covers shareholders from April 14, 2021, to June 5, 2023, claims Coinbase hid business risks from investors.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase Global Inc in 2022, accusing the company of operating an unregistered securities exchange in the U.S. District Court, District of New Jersey. Following this, Coinbase's share price took a significant hit, falling by 12% in June 2023.
Earlier, in May 2022, the company's share price also dropped by 26% after it disclosed a decline in revenue. The lawsuit now proceeding suggests that investors may have been kept in the dark about these potential issues.
The lawsuit against Coinbase is set to proceed, with shareholders alleging the company failed to disclose potential legal risks. The SEC's lawsuit and the subsequent share price drops highlight the importance of transparency in business operations and communications with investors.
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