Who would have thought that after XRP getting targeted directly by the SEC, it would be Coinbase that would end up getting dragged into the XRP drama? This time it is one of the users of one of the largest cryptocurrency exchanges that has hit the platform with an allegation.
It has been reported that one of the users at Coinbase has filed a class-action lawsuit against the platform. He has alleged the exchange for selling him XRP securities in the form of XRP tokens, which is an illegal act as per the U.S. regulations.
It has been confirmed by the sources that the legal document has been submitted against the case on December 30, 2020. The document has been submitted to District Court based in California. According to sources, the lawyer representing the plaintiff is Thomas Sandoval who is from St. Louis.
In the legal document, the lawyer has stated that being a digital exchange as well as a broker for cryptocurrency commodities, Coinbase does not have the approval or license for selling securities.
The allegation made by the plaintiff’s lawyer points directly towards the recent proceedings where SEC has alleged Ripple (XRP) for doing the same. Based on SEC’s allegations against XRP, it is proven that by listing XRP, Coinbase is also part of the illegal activity selling XRP securities.
The lawyer claimed that by doing this, Coinbase gained supremacy and acquired more user-base because the rest of the cryptocurrency exchanges acted only as commodity selling entities.
The lawyer of the plaintiff has alleged the exchange ‘Coinbase’ of carrying out its activities even when it knew it was breaching the regulations. In the allegation, it has been added that the Coinbase platform has defrauded a lot of its investors by doing this. The exchange knew very well what it was offering its customers and the risks that were involved.
The exchange knew that XRP was not a commodity but security and kept selling it to the investors. By doing this, it let the investors trade the XRP assets outside the legal parameters that the exchange was expected to operate.
The plaintiff claimed that he had purchased XRP through Coinbase back in November 2020. Even before the legal action was taken against Ripple (XRP) by the SEC, its prices were already fluctuating.
Since the SEC has announced taking legal action against the crypto-asset, things have turned out to be the worst for XRP. In a matter of just two weeks, Ripple’s market capitalization has dropped down by 93%. Before the allegations and legal action taken by the SEC, XRP’s market capitalization was $134 billion. After the allegation and its removal from a majority of the cryptocurrency exchanges, its capitalization is down to $10 billion.