Coinbase (COIN) Bankrupt Custodially Held Crypto Assets Case

The court has denied the request to dismiss the case, allowing it to proceed.

D. New Jersey

Court

2:22-cv-04915

Case number

04/14/2021

Class period Start

06/05/2023

Class period End

10/04/2022

Lead Plaintiff motion deadline

On May 10, 2022, Coinbase disclosed that: “Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.”

In the following tweet commenting on the disclosure, Coinbase’s CEO, Brian Armstrong stated: “We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added. My deepest apologies, and a good learning moment for us as we make future changes.”

By this statement, Armstrong confirmed failure to disclose materially important information to all stakeholders of the Company and as a result breach of fiduciary duties to them.

Following this disclosure, $COIN fell by 26.4%, seriously damaging shareholders.

Considering all the facts, Investors have grounds to suspect Coinbase and its Executives of failing to disclose important information, which led to their financial losses.

Case Status

Motion to dismiss denied

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

06/05/2023

Filing date

08/04/2022

Lead Plaintiff Deadline

10/04/2022

Judge

Hon. Brian R. Martinotti