Coinbase Execs Face Lawsuit From Shareholder


Key Takeaways

  • A shareholder has filed a derivative lawsuit against Coinbase executives over the company’s 2021 public listing.
  • The suit alleges that mismanagement disrupted Coinbase’s “flywheel” growth strategy to the detriment of investors.
  • The lawsuit, if it is successful, could see CEO Brian Armstrong and other executives pay damages to Coinbase itself.

Share this article

Crypto exchange Coinbase is facing a derivative lawsuit from a dissatisfied shareholder over its 2021 stock listing.

Coinbase Faces Derivative Suit

A Coinbase shareholder has filed a suit against the company.

The filing alleges that Coinbase misrepresented various facts and engaged in gross mismanagement before it obtained a direct listing on the stock market in April 2021. Specifically, the filing complains that Coinbase “generated a massive influx” on its exchange through an extensive advertising campaign prior to its listing. This caused an “unprecedented spike” in activity and led to service disruptions.

This sudden growth, in turn, broke the company’s “flywheel” growth strategy to the detriment of its investors. According to the filing, Coinbase’s efforts to increase its user count “backfired, leaving [the company] and its newfound investors damaged and vulnerable to the competition.”

In addition to those complaints, the lawsuit also alleges that Coinbase’s public listing violated securities regulations. It alludes to related securities action from the U.S. Securities and Exchange Commission, which aims to determine whether customers were allowed to trade unregistered securities.

Today’s filing targets CEO Brian Armstrong, CFO Alesia Haas, and Chief Account Officer Jennifer Jones. Additionally, directors Fred Ehrsam, Marc Andreesen, and Kathryn Haun, Gokul Rajaram, and Fred Wilson are listed as defendants.

The lawsuit was advanced by shareholder and plaintiff Donald Kocher. Though Kocher’s relationship with Coinbase is unclear, the lawsuit is a derivative suit, meaning that it seeks to have the executives pay damages to Coinbase itself.

The filing was submitted to the U.S. District Court for the District of Delaware. Various other lawsuits have been filed against Coinbase regarding its IPO over the past year, including one in New Jersey and one in the Northern District of California.

General dissatisfaction among investors may be due to the falling value of the company’s stock. COIN was priced at $342 when it was listed in April 2021; it is now valued at $87.68.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.

Share this article



Source link

Related articles

Dogecoin (DOGE) Restoration Sees Uptick — However Lacks Observe‑Via at $0.168

Dogecoin began a contemporary improve above the $0.160 zone in opposition to the US Greenback. DOGE is now consolidating and would possibly intention for a transfer above $0.1680. DOGE value began a contemporary improve...

Why AI will eat McKinsey’s lunch — however not as we speak

Navin Chaddha, managing director of the 55-year-old Silicon Valley enterprise agency Mayfield, is betting large on AI’s capacity to rework people-heavy industries like consulting, regulation, and accounting. The veteran investor, whose wins embody...

Consultants Warn of Crypto’s Function in Terror Group Boko Haram’s Cross-Border Enlargement

Nigerian terrorist group Boko Haram is more and more counting on cryptocurrencies, cellular cash, and different digital instruments to fund its operations, transferring thousands and thousands acquired by means of ransoms, looting, and...

Winnipeg-based Conquest Planning, which makes use of AI to assist monetary advisors and different purchasers make choices, raised an $80M Collection B led by...

Featured Podcasts Lenny's Podcast: Naming skilled shares the method behind creating billion-dollar model names like Azure, Vercel, Windsurf, Sonos, Blackberry, and Not possible Burger | David Placek (Lexicon Branding) Interviews with world-class product leaders and development...

Prop-Agency Pleasant EA Settings — Go the Problem Safely (Reside Proof) – My Buying and selling – 29 June 2025

Most merchants blow their prop agency problem in 10 days or much less.However what in the event you handled every try like a...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com