A Coinbase shareholder, Donald Ramsey, has opened a securities class action lawsuit filed against Coinbase, accusing the company of deception over it’s financial position and fundamental resilience prior to the company’s public listing just 3 months ago.
The class action lawsuit, alleges that the offering materials were “false and misleading”, and that the company failed to disclose that it required a significant injection of of cash at the time of the public offering. The plaintiff claims that since the IPO, the value of the company’s stock has been on a steady decline.
The Coinbase stock price has fallen over 45% since it’s public listing, and Donald Ramsey’s suit claims that this is in part due to the misleading statements coming to light in its listing memorandum.
The company’s CEO, Brian Armstrong, and CLO Paul Grewal, along with other senior Coinbase executives and VC backers are also named as defendant’s in the case, which is being brought on behalf of thousands of investors who purchased Coinbase’s Class A common stock based on materials disseminated before it’s mid-April IPO.
In this latest lawsuit filed against Coinbase in the State of California, the plaintiff alleges that the exchange claimed to empower “the crypto-economy” and referred to itself as a “trusted platform” for transacting Bitcoin and other crypto’s.
However, within a month of the IPO the Class Action lawsuit states that “the high-flying promise of Coinbase came to a screaming halt.” as Coinbase announced a bond sale to raise around $1.25 billion. Furthermore, just two days later, Coinbase said it was suffering technical challenges due to network congestion.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, plaintiff and other class members have suffered significant losses and damages.”Donald Ramsey’s lawsuit filed against Coinbase, July 2021
Second lawsuit filed against Coinbase in the same week
This is the second lawsuit filed against Coinbase in a week, the first being one being brought by David Suski, a user of the platform who is suing the company over misleading customers into trading Dogecoin in exchange for a Sweepstake reward. Dogecoin was first listed on the platform again back in April 2021, as the memestock was making significant gains before it’s ultimate pullback in June 2021.
The plaintiff, Donald Ramsey, is being represented by John T. Jasnoch, Thomas L. Laughlin IV and Jonathan M. Zimmerman of Scott + Scott. We will of course be closely following this case as it makes it’s way through the system.