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Locking accounts and cryptocurrency as security are issues raised by the plaintiff in the Coinbase case

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News Tech: One user has launched a class-action lawsuit against Coinbase on behalf of account and wallet users “who have had their accounts compromised and sustained losses resulting from the illicit transfer of funds.”

The complaint claims that “Coinbase does not disclose that the crypto assets on its platform are securities.” “In fact, Coinbase defies federal and state regulations by declaring that it does not require a registration statement for such securities and by refusing to register as a securities exchange or broker-dealer.”

Plaintiff George Kattula requested a jury trial against Coinbase in an Aug. 15 filing in the United States District Court for the Northern District of Georgia, claiming the crypto exchange did not employ practises aimed at keeping users’ accounts secure and had “improperly and unreasonably” locked clients out of their accounts during periods of peak volatility in the crypto market. Furthermore, Kattula said that Coinbase should be licenced in the United States as a broker or dealer since the site manages the transfer of securities — in this case, cryptocurrencies.

The filing also stated:

The SEC charged a former Coinbase product manager, his brother, and a colleague with insider trading in July, alleging that at least nine of the 25 cryptocurrencies the trio allegedly utilised were securities.

Kathy Kraninger, former head of the Consumer Financial Protection Bureau, told Cointelegraph on Tuesday that regulatory certainty in the crypto field might come down to case law. In a Friday filing, the defence team of a former OpenSea employee also accused of insider trading said that prosecutors purposely sought charges to establish a legal precedent that nonfungible tokens were securities.

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