A federal judge narrowed shareholder lawsuit alleging that Coinbase concealed risks related to SEC and bankruptcy

A federal judge has determined that Coinbase Global Inc. must face a shareholder lawsuit denounced crypto exchanges that hide business risks. The lawsuit includes actions by the Securities and Exchange Commission (SEC) and may affect the outcome of bankruptcy proceedings.

The decision of US District Judge Brian Martinotti on Tuesday night in Newark, New Jersey rejected requests from Coinbase, its executives and directors for a complete dismissal of the case. The judgment means that while some claims have been dismissed, other claims that have been specifically filed against the individual defendants will proceed.

Martinotti says it cannot pursue lawsuits based on the group that shareholders are suing

Shareholders I said That Coinbase misled them with the belief that it was unlikely that the SEC would accuse them of running an unregistered stock exchange. They also claim that the company did not disclose the risk that it could potentially lose its assets in the event of bankruptcy.

Just In: A federal judge has allowed shareholder litigation to be reduced against Coinbase, accusing them of hiding the risks and potential asset losses in Sec litigation. pic.twitter.com/6gzqrtl5ua

– Cryptopolitan (@cpofficialtx) October 1, 2025

According to US District Judge Martinotti’s decision, shareholders were prohibited from pursuing claims based solely on the group’s suit. He cited scenarios where statements made in company documents, such as press releases and blog posts, would not be automatically linked to a particular defendant. According to Martinotti, if the plaintiff properly provides the defendant’s speciality by the defendant, the claim must be left.

However, the judge’s 59-page decision does not specify which statement was rejected as the parties did not identify what could constitute a group plea.

Nasdaq’s Coinbase shares rose 2.8% at the time of publication. trading $344.23. On June 6, 2023, the stock price fell approximately 12% after the SEC lawsuit accused Coinbase of allowing to trade with tokens, which was considered unregistered securities. Despite some lawsuits, the stock maintains a 38.4% plus YTD, indicating that investors’ trust in the token is positive.

The shareholder lawsuit, led by Swedish pension fund Sjunde Ap-Fonden, is targeted at shareholders who purchased Coinbase shares by April 14, 2021 and June 5, 2023. The lawsuit outlines several accusations, including the dissemination of misleading information from the regulatory returns and dozens of statements made in statements that have won posts on media media. The lawsuit is set to move forwardfollowing the Trump administration’s move, despite the SEC closing its lawsuit against Coinbase earlier this year. To facilitate regulatory oversight in the cryptocurrency industry.

Coinbase’s legal issues grow deeper following previous data breach lawsuits

According to the recent post Due to Cryptopolitan, Coinbase previously required the U.S. Department of Justice to intervene in state-level enforcement measures that contradict federal law. DOJ described it as a “patchwork” of lawsuits and licensing schemes destroying the US cryptocurrency market.

in letter For DOJ, Coinbase Chief Legal Officer Paul Grawal has urged a federal lawsuit to prevent the state from enforcing enforcement measures that are legal under federal regulations. Coinbase has singled out an Oregon lawsuit accusing Coinbase of selling unregistered securities, treating Ethereum as security and criticizing New York’s attempts to stop the stain.

Coinbase also highlighted stop orders received from California, Maryland, New Jersey and Wisconsin, as well as its latest action in Maine targeting its staking services and self-compromising wallets.

Grewal called on the U.S. Department of Justice to support a wide range of preemptive provisions in pending Congressional laws, including the House of Representatives’ clear actions and the Senate’s responsible financial innovation law. Senate Banking Committee members are expected to soon win a vote on market structure law.

Coinbase also faced at least six lawsuits to expose nearly 80,000 users in lawsuits filed between May 13th and May 16th, 2025. The lawsuit accused Coinbase of protecting customer data, violating privacy laws and mishandling fallouts from violations. One New York complaint claims that Coinbase’s security practices are inadequate, fragmented and delayed, and that users are exposed to identity theft and fraud.