NEW YORK (Reuters) -A U.S. judge on Wednesday dismissed a lawsuit accusing Coinbase Global Inc of selling unregistered securities and failing to register as a broker dealer.
U.S. District Judge Paul Engelmayer in Manhattan rejected claims in the proposed class action by customers who transacted in digital assets known as tokens on the Coinbase and Coinbase Pro trading platforms.
Engelmayer said customers could not show that Coinbase actually sold or held title to the tokens, despite having allegedly promoted their sale by describing their “purported value proposition” and participating in “airdrops” of free tokens to increase trading volume.
“These activities of an exchange are of a piece with the marketing efforts, materials and services that courts … have held insufficient” to qualify defendants as sellers, Engelmayer wrote.
Engelmayer dismissed claims brought under federal securities laws with prejudice, meaning they cannot be brought again, and state law-based claims without prejudice.
Lawyers for the customers, Coinbase and the company’s lawyers did not immediately respond to requests for comment.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese and Cynthia Osterman)
