Coinbase faces class-action lawsuit for listing XRP despite knowing securities concerns

After being exposed for discrimination controversies, Coinbase is now accused by users of violating California's "Unfair Competition Law" by knowingly offering XRP trading to the public despite XRP being classified as a security, adding another controversy before its IPO.

XRP Lawsuit Ignites Controversy at Coinbase

Coinbase, which is set to go public soon, seems to be facing some turbulence recently. Not long ago, both The Times and The New York Times revealed that after analyzing internal salary data, the company was found to pay significantly less to female and Black employees compared to similar companies in the tech industry. Allegedly, women working at Coinbase are paid an average of $13,000 (about 8%) less than men. Additionally, The New York Times reported that Black employees are paid $11,500 (7%) less than all other workers in similar roles.

Recently, Coinbase has been embroiled in a lawsuit involving XRP, adding another layer of controversy before its IPO.

According to a lawsuit document from the California federal court, a Coinbase customer named Thomas Sandoval led a class-action lawsuit against Coinbase, stating in the complaint:

"Despite Coinbase's awareness that XRP is a security, it provided XRP trading services to the public and charged sales commissions."

The plaintiff claims that Coinbase positions itself as a digital asset exchange but is essentially a cryptocurrency commodity broker, not authorized to sell "securities" products. The lawsuit alleges that Coinbase knowingly listed XRP for trading, despite the token being under Ripple's control and having security concerns, and charged fees for it. This deliberate act of violating California's Unfair Competition Law by engaging in known misconduct has been brought to light.

Although Coinbase had previously announced a full suspension of XRP trading starting January 20, 2021, to avoid regulatory concerns from the SEC, it seems difficult for Coinbase to swiftly resolve the anger of XRP investors.