Coinbase Sued in California For Illegal Sale Of XRP

The US-based cryptocurrency exchange, Coinbase, is being sued for receiving commissions for illegally selling XRP on its platform.

December 31, 2020 | AtoZ Markets – Crypto exchange Coinbase has been embroiled in litigation over the sale of XRP tokens.

One Thomas Sandoval claims that an American trading platform offered XRP to retail investors knowing that the token qualifies as a security under federal laws. Moreover, the exchange received commissions from such transactions.

In addition, Sandoval claims that Coinbase gained "an unfounded competitive advantage" over other exchanges that only offered "commodity assets."

According to Stephen Pally, a partner at law firm Anderson Kill, the lawsuit isn't as bad for Coinbase as it is for the SEC. Most likely, the company will incur some kind of punishment, this lawsuit does not pose a big financial risk for it, he said.

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In addition, the expert believes that the accusation is based on the assumption that Coinbase knew about the status of XRP and deliberately committed fraud. Although this statement does not hold water, as the status of the token has yet to be determined.

The timing of the filing of the claim deserves special attention: the exchange is preparing to go public in 2021.

Earlier this week, AtoZ Markets reported that Coinbase has suspended XRP trading due to the lawsuit against Ripple Inc.  The US court has set February 22 for the first hearings in SEC V. Ripple case.

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