A fresh legal action has been initiated against Coinbase and its CEO, Brian Armstrong, by a group of plaintiffs. This lawsuit alleges that SOL, MATIC, NEAR, MANA, ALGO, UNI, XTZ, and XLM are considered securities by the plaintiffs.

The lawsuit accuses Coinbase of deceiving investors into purchasing securities and violating securities laws. The individual complainants claim that Coinbase has misrepresented the nature of these digital assets. They specifically point out Solana (SOL), Polygon (MATIC), Near Protocol (NEAR), Decentraland (MANA), Algorand (ALGO), Uniswap (UNI), Tezos (XTZ), and Stellar Lumens (XLM) as securities.

Allegations Against Coinbase and Brian Armstrong

Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard have collectively filed a class action lawsuit against Coinbase Global and its CEO, Brian Armstrong. The plaintiffs accuse Coinbase of repeatedly breaching securities laws in California and Florida. They argue that Coinbase's own user agreement identifies it as a "Securities Broker," thereby implying that the digital assets sold on the platform are securities. The lawsuit also targets Coinbase's prime brokerage activities as a securities broker/dealer.

The plaintiffs claim that the digital assets listed on Coinbase, including Algorand, Decentraland, Polygon, Near Protocol, Uniswap, Solana, Stellar Lumens, and Tezos, should be classified as securities. They further allege that Coinbase Earn accounts violated securities regulations by promoting higher yields.

Coinbase's Legal Maneuvers and SEC Dispute

Coinbase has taken steps to clarify the definition of an "investment contract" in its ongoing legal battle with the U.S. SEC. By filing an interlocutory appeal, Coinbase aims to challenge the SEC's interpretation of investment contracts, which they believe diverges from established legal precedents. This move follows a recent legal victory for Coinbase in the US Court of Appeals for the Second Circuit, where it was determined that secondary crypto sales do not constitute securities due to the absence of investment contracts.

The outcome of Coinbase's interlocutory appeal is crucial not only for its dispute with the SEC but also for the Ripple Vs SEC lawsuit. This legal development could impact the SEC's potential appeal regarding the classification of programmatic sales of XRP as securities.