A new amended class action complaint has been filed against Coinbase, providing more detail on how insiders allegedly profited from the cryptocurrency exchange's rollout of bitcoin cash last December.
The document, filed Nov. 20 with the U.S. District Court for the Northern District of California, outlines why the plaintiffs believe Coinbase "made false and deceptive statements" about its rollout of the bitcoin fork; how the exchange allegedly caused bitcoin cash's price to spike while simultaneously depressing bitcoin's price; and how insiders who knew Coinbase would list bitcoin cash were able to allegedly buy and sell the token before other customers.
The complaint explained:
Tuesday's filing comes just under a month after a federal judge initially dismissed plaintiff Jeffrey Berk's original suit. At the time, Judge Vince Chhabria stated that it was unclear what Berk's legal basis was, what he believed Coinbase should have done or how the rollout could have gone more smoothly.
As such, the amended complaint alleges that the rollout failed to abide by the token listing standards on GDAX (now Coinbase Pro). Further, while Coinbase said it would let investors know ahead of time when it would permit bitcoin cash withdrawals, it instead opened withdrawals without warning, the suit claims.
When bitcoin cash was listed, only purchase orders were permitted on the platform, causing the price to spike, the plaintiffs allege.
The plaintiffs are seeking damages and restitution, in an amount to be determined at trial, as well as the costs incurred during the course of the lawsuit.
The document concludes by demanding a jury trial on the issues laid out.
While the amended complaint was originally due within 21 days of the previous order – Nov. 13 – the plaintiffs and defendants agreed to an extension, allowing the plaintiffs to file the new document on Nov. 20.
, Coinbase must provide a response by Dec. 20, and while both parties will have an opportunity to file another response each, a hearing has been scheduled for Jan. 31, 2019.
An attorney for the plaintiffs did not immediately respond to a request for comment.
Coinbase declined to comment.
Read the full amended complaint here:
Second Amended Class Action... by on Scribd
Coinbase CEO Brian Armstrong image via YouTube
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.