Coinbase Wins Key Ruling in WLUNA Lawsuit, Securities Claims Axed
A significant development has occurred in the lawsuit targeting Coinbase over its handling of WLUNA trading during the infamous 2022 Terra collapse. A federal judge has dismissed securities law violation claims against the exchange, signaling a major win for Coinbase and remanding the remaining allegations to arbitration.
Key Takeaways
- Securities claims against Coinbase related to WLUNA trading suspension have been dismissed.
- The judge cited a lack of substantiation from the plaintiffs regarding the trading halt being “temporary.”
- The remaining claims of breach of contract, fraud, and conversion will proceed to arbitration.
- The court warned of potential sanctions due to deficiencies in the plaintiffs’ complaint.
The ruling, handed down by Judge Jed S. Rakoff of the United States District Court, Southern District of New York, addresses the plaintiffs’ assertion that Coinbase’s suspension of WLUNA trading constituted a violation of securities laws. However, during a March 13 hearing, Coinbase’s legal team effectively dismantled this argument. They pointed out the plaintiffs’ inability to provide evidence that the trading halt was ever described as “temporary,” a critical detail that evidently swayed the court.
Judge Rakoff’s skepticism was palpable, leading to a stern warning to the plaintiffs’ lawyers about potential sanctions. The judge strongly encouraged them to revise their complaint to address the flagged deficiencies. With securities claims out of the picture, the case now shifts focus to allegations of breach of contract, fraud, and conversion, all of which have been directed towards arbitration.
CRYPTO IN THE COURTS: Coinbase Was Sued for Suspension of WLUNA Trading — Now Securities Claims Dismissed, Rest Sent to Arbitration by Judge Rakoff – Inner City Press story: https://t.co/aQhOCAeQrX pic.twitter.com/sdyAHoVYI5
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