Alongside Coinbase itself, the class action names CEO Brian Armstrong, CLO Paul Grewal, other top executives and several of its venture capital backers as defendants.
A Coinbase shareholder has filed a securities class action against Coinbase for allegedly misleading investors ahead of its public listing about the company’s financial state and resilience as a crypto trading platform.Filed by law firm Scott + Scott in California Northern District Court on Thursday, the class action names Coinbase shareholder Donald Ramsey as a plaintiff, both individually and on behalf of all other investors similarly situated. Ramsey is pursuing his claims under the United States Securities Act and has presented evidence drawn from Coinbase’s regulatory filings with the Securities and Exchange Commission (SEC), company press releases, analyst reports and other publicly disclosed information about the exchange.Alongside the company itself, the class action names CEO Brian Armstrong, CLO Paul Grewal and other top executives as defendants, as well as several of its venture capital backers.Ramsey accuses Coinbase and its executives of making “materially misleading statements” in their offering materials at the time of the public listing and offering positive statements that “lacked a reasonable basis.” The class action alleges that:“At the time of the Offering: (1) the Company required a sizeable cash injection; (2) the Company’s platform was susceptible to service-level disruptions, which were increasingly likely to occur as the Company scaled its services to a larger user base.”Ramsey further alleges that once the alleged discrepancies between self-presentation and reality came to public light, Coinbase’s share price fell accordingly.
