Coinbase Wins Partial Dismissal In Shareholder Lawsuit: Report

According to a report by Reuters, U.S. District Judge Brian Martinotti dismissed many claims but declined Coinbase’s request for a full dismissal.

Coinbase (COIN) secured a partial victory in court on Wednesday after a federal judge allowed a limited shareholder lawsuit to advance while rejecting broader allegations against the company.

According to a report by Reuters, U.S. District Judge Brian Martinotti in Newark, New Jersey, dismissed many claims but declined Coinbase’s request for a full dismissal. The report stated the ruling permits some shareholder claims tied to specific statements by company executives and directors to move forward.

COIN’s stock moved 3% higher in midday trade with retail sentiment on Stocktwits around the cryptocurrency exchange rising to ‘bullish’ from ‘bearish’ over the past day. The rally also comes amid rising strength in the cryptocurrency market. Bitcoin’s (BTC) price crossed $117,000 at the time of writing, having risen as much as 3.8% in the last 24 hours. 

The lawsuit alleged that Coinbase misled investors into believing it was unlikely the Securities and Exchange Commission (SEC) would accuse the company of operating as an unregistered securities exchange. Shareholders also claimed Coinbase downplayed risks that customers could lose assets if the company entered bankruptcy.

Martinotti rejected claims based on “group pleading,” which attributes alleged misstatements to all executives collectively. “Where plaintiffs have appropriately provided defendant-by-defendant particularity, the claims must remain,” Martinotti wrote.

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