It seems that Coinbase and lawsuits go hand in hand for now.
After the notorious allegations of insider trading that were eventually followed by a class action lawsuit, Coinbase has been challenged by another party in a different case – this time for unlawful business practices which pertain to maintaining hold of unclaimed crypto coins.
Details on Coinbases new lawsuit
The class action lawsuit, naming the main plaintiffs as Timothy G. Faasse and Jeffrey Hansen, holds Coinbase as the defendant in a case that is introduced as outlined below:
“Imagine writing a cashier’s check to a friend. The bank withdraws funds from your account, but your friend never cashes the check. Does the bank get to keep the funds? The law clearly says no. But this is exactly what has happened with Cryptocurrencies sent through Coinbase.com.” The lawsuit reads, filed in the U.S. District Court for the Northern District of California.
The document then goes on to state that the case is against Coinbase’s handling of cryptocurrencies that were never claimed by their rightful owners to whom they had been sent.
Elaborating on the issue, the case states that Coinbase had sent numerous emails to its customers, informing them that they had new cryptocurrencies which they can claim through the email. The new cryptocurrencies were either distributed as rewards or were shared by “airdrops” – the method where new crypto coins are distributed amongst the holders of existing, specific cryptocurrencies as a marketing move and to increase the user base for new coins.
The document then mentions that there had been several customers that never got to respond to such emails for various reasons, in which case the cryptocurrencies went unclaimed, but still existed on the blockchain. The plaintiffs allege that instead of contacting them through other means about the cryptocurrencies or returning the funds to the State of California as per its Unclaimed Property Law, Coinbase “kept” the cryptocurrencies.
The plaintiffs seek a jury trial to pursue the case further in order for the matter to be resolved in the court of law.
No comments had been presented by Coinbase about this instance before this new class action came to surface. Since the case awaits further action, updates could only become available once it moves forward.
The previous, insider trading lawsuit against Coinbase
The previous class action lawsuit was filed against Coinbase on account of alleged instances of insider trading.
The case alleges that a month before launching Bitcoin Cash, Coinbase had revealed its plans about the same to its employees, who then used the information to hike up the price of Bitcoin Cash by hoarding the buy and sell orders – which led to late execution of non-insider trading orders at higher prices.
Much like the new lawsuit, this class action also seeks a jury trial.
Coinbase’s CEO, Brian Armstrong, had denied the allegations of insider trading before the lawsuit had been filed. However, no further comments had come to surface from Coinbase .