A man who claims to be a Coinbase customer has filed a lawsuit against the exchange for allowing the sale of XRP on the crypto exchange in an event in which the SEC has filed a suit to challenge the legality of the digital asset.
The complainant Thomas C. Sandoval filed the suit in the Northern District Court of California. He alleges that Coinbase participated in the sale of XRP and made a profit from it, knowing it was an unregistered security.
A section of the complaint reads: “Coinbase sold a token called Ripple (hereafter referred to by its trading symbol: XRP), the value of which was entirely linked to the success or failure of Ripple Labs, Inc. (Ripple Co.) the company that created the token, and the managerial efforts of Ripple Co.s executives. Investors in XRP, such as Plaintiff, reposed an expectation of profit in such managerial efforts by Ripple Co. executives and purchased the token in order to make money on their investment,”
The suit also alleges that Coinbase enjoyed unfair advantages against other exchanges that only sold commodities that are in violation of California’s unfair competition law.
This lawsuit against Coinbase is coming just a week after the SEC filed a lawsuit against Ripple and its top executives. The suit claims that Ripple has been selling an unregistered security (XRP) for more than seven years without registering it or seeking exemption.
Although Coinbase suspended the trading of XRP on Monday as a result of the SEC lawsuit, the complainant is asking for some compensation for damages, attorney’s fees, and any other punishment as the court deems necessary.