A federal judge in Newark, New Jersey, on Tuesday night, 2025-10-01, ruled that Coinbase shareholders may pursue a narrowed lawsuit accusing the exchange of concealing business risks, including the possibility of a Securities and Exchange Commission (SEC) lawsuit and bankruptcy exposure. The decision was issued by U.S. District Judge Brian Martinotti, who rejected requests by Coinbase executives and directors for a full dismissal of the claims based on statements made over two years in regulatory filings, earnings calls, blog posts and tweets.
Shareholders allege that Coinbase misrepresented the likelihood of an SEC action and the risk of asset loss if the company filed for bankruptcy, asserting that the exchange had defrauded them by presenting an overly optimistic view of regulatory compliance and financial stability. The lawsuit seeks to hold the company accountable for these alleged misstatements and to recover damages for investors who were misled.
While the court has narrowed the scope of the lawsuit rather than dismissing it outright, the ruling signals heightened legal scrutiny and could influence investor sentiment. The outcome may prompt further regulatory investigations and could lead to additional litigation, potentially affecting Coinbase’s reputation and shareholder confidence in the short term.
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