Coinbase faces class action lawsuit in California over XRP sale
December 30, 2020, 5:08PM EST
1 min read
A new lawsuit in California federal court alleges that Coinbase violated the state's unfair competition laws by making a commission from the sale of Ripple's XRP. Ripple was recently sued by the Securities and Exchange Commission (SEC) for allegedly issuing XRP as an unregistered securities offering.
The new class-action suit was filed by Thomas Sandoval, who claims that Coinbase profited from the sale of XRP while knowing that it was a security. Coinbase should have known it would be considered a security, Sandoval argues, because it was aware all nodes were under Ripple's control.
The case alleges Coinbase broke California's unfair competition law by profiting on the sale of XRP while having sufficient knowledge to know the asset would be considered a security. The law protects against false advertising and fraudulent or deceptive business practices.