The largest cryptocurrency exchange in the US is facing a lawsuit over its sale of the crypto asset XRP.
In a lawsuit filed in a federal court in San Francisco, California, plaintiff Thomas Sandoval alleges that Coinbase sold XRP despite knowing that the cryptocurrency is a security and not a commodity.
He is seeking damages for the commissions that the exchange collected from him and other Coinbase customers, reports Bloomberg.
“Until late this month Coinbase sold the XRP token, the value of which was entirely linked to the success or failure of Ripple Co. and the managerial efforts of its executives.
Indeed, Ripple Co.’s survival as a corporate entity depended on its sale of unlicensed XRP securities to the public to fund its business operations.”
In a statement released this week, Coinbase said it is suspending the trading of XRP as Ripple faces a lawsuit from the U.S. Securities and Exchange Commission (SEC) over its sale of the crypto asset. SEC claims that the payments processing firm, which owns the lion’s share of XRP, violated federal securities laws by selling the digital asset without registering it as a security.
“In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform.
Trading will move into limit only starting December 28, 2020 at 2:30 PM PST, and will be fully suspended on Tuesday, January 19, 2021 at 10 a.m. Pacific Standard Time.”