A U.S. district judge partially denied Coinbase's motion to dismiss the lawsuit, allowing the shareholder class action to proceed

ChainCatcher news, according to Coindesk, U.S. District Judge Brian Martinotti in New Jersey ruled on the Coinbase shareholder class action lawsuit, partially rejecting Coinbase's motion to dismiss the lawsuit. The lawsuit stems from 2022, where shareholders accused Coinbase of misleading disclosures regarding regulatory risks.

The judge found that the plaintiffs made credible allegations regarding Coinbase's behavior when describing the likelihood of the U.S. Securities and Exchange Commission (SEC) taking enforcement action. Judge Martinotti noted in the ruling document: "The plaintiffs adequately demonstrated that the defendant misleadingly described the low probability of the SEC filing an enforcement action, repeatedly emphasizing that its listed crypto assets are not securities." The SEC sued Coinbase in June 2023 for violating federal securities laws, and the case is still ongoing. In the SEC lawsuit, the judge similarly dismissed most of Coinbase's motion to dismiss, indicating that the SEC's allegations have sufficient legal grounds for further proceedings.

Although the court supported some of the shareholders' claims regarding regulatory risk disclosures, it dismissed most of the other allegations in the lawsuit. A Coinbase spokesperson responded: "The court agreed to dismiss most of the plaintiffs' claims. The remaining parts are allowed to proceed mainly due to the procedural nature of the motion to dismiss. We are confident that we will stand firm on both factual and legal grounds and look forward to proving this in the subsequent litigation."