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Coinbase facing class-action lawsuit amidst SEC investigation

Coinbase is faced with more legal battles as two law firms have filed a lawsuit against the company amidst an ongoing investigation by the SEC.

On August 4, two New York-based law firms Bragar Eagel & Squire and Pomerantz LLP filed a class-action suit against Coinbase Global in the US District Court of New Jersey.

The lawsuit alleges that Coinbase misled the public about its business activities and compliance policy as it relates to claims on customers’ assets in the case of bankruptcy and issues of trading unregistered securities.

The firms initiated the case on behalf of all parties, who acquired Coinbase shares between April 14, 2021, and July 26, 2022, seeking to recover damages caused by Coinbase’s alleged misleading statements.

The Case against Coinbase

Specifically, Coinbase is said to have provided false or incomplete information on the custody of customers’ assets and issues relating to trading securities.

The law firms, citing Coinbase’s quarterly report for Q1 2022, claim that the exchange did not properly communicate to the customers about the eventual claim on their assets in the case of bankruptcy. Coinbase stated in the report:

“Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.”

Following the disclosure, Coinbase CEO Brian Armstrong said in a tweet:

 “We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added.

As a result, the Coinbase Class A common stock fell by 26.4% to close at $53.72 per share on May 11, 2022, leading to more loss for its investors.

The case against Coinbase also included the ongoing probe by the SEC. The SEC is investigating if Americans were improperly allowed to trade unregistered securities on the exchange.

SEC still investigating Coinbase

Coinbase has been under investigation by the SEC over allegations that it listed unregistered securities on its platform. The SEC opened the probe following an insider trading case against a  former Coinbase employee Ishan Wahi.

According to the SEC, 9 out of the 25 crypto assets Ishan traded while at the exchange are securities. Coinbase, however, has refuted the claims stating it does not list securities. Coinbase Chief Legal Officer Paul Grewal wrote a blog post stating:

“Coinbase does not list securities on its platform. Period.”

The post Coinbase facing class-action lawsuit amidst SEC investigation appeared first on CryptoSlate.

Nayib Bukele Attributes Tourism Recovery in El Salvador to Bitcoin, Surf, and Crime Reduction

Nayib Bukele, the president of El Salvador, declared that the speedy recovery of tourism in the country had to do with three elements, including surfing, bitcoin, and overall crime reduction. El Salvador was one of the 15 countries that managed to take their tourism incomes to pre-pandemic numbers according to data from the World Tourism::Listen

Nayib Bukele Attributes Tourism Recovery in El Salvador to Bitcoin, Surf, and Crime Reduction

Nayib Bukele, the president of El Salvador, declared that the speedy recovery of tourism in the country had to do with three elements, including surfing, bitcoin, and overall crime reduction. El Salvador was one of the 15 countries that managed to take their tourism incomes to pre-pandemic numbers according to data from the World Tourism Organization.

Nayib Bukele States International Tourism Growth Is Powered by Bitcoin in El Salvador

Nayib Bukele, the president of El Salvador and promoter of the adoption of bitcoin (BTC) as legal tender in the country, shared his thoughts about the growth of the tourism income in the Salvadoran country. Bukele stated that this growth was the consequence of three key factors: bitcoin, the promotion of surf, and the reduction of crime.

In a tweet, the president stated:

Only a handful of countries have been able to recover its tourism to pre-pandemic levels. And that’s international tourism, so the reasons behind it are mostly bitcoin and surf.

El Salvador was recently included in a list of countries whose tourism income has returned to pre-pandemic levels. According to the World Tourism Organization, El Salvador has managed to grow its tourism income by 6% when compared to 2019.

This report is consistent with what the authorities have been reporting about the effect that the inclusion of bitcoin in the country since it was declared legal tender. In February, Morena Valdez, minister of tourism in the country stated that the tourism industry had risen 30% since this event.

Statistics further show that El Salvador’s crime and homicide rate has dropped significantly since 2020. Moreover, in terms of surf, the El Salvador is home to some of the top rated waves in the world.


National Tourism Also Growing

However, the president also made reference to the growth in national tourism, stating:

But internal tourism is growing even more, mainly because of our crackdown on gangs.

Bukele’s government was criticized heavily due to the measure sit has taken to stop gang-related crime, declaring a state of emergency that resulted in more than 9,000 individuals being detained last April. However, Bukele claims this has pushed the growth of the national tourism industry.

To support his arguments, Bukele also linked the Google Mobility Report, a compendium of data that shows the change in the number of visits that are happening to certain places. The report shows that the visits to retail and recreation places, grocery stores and pharmacies, and parks have all grown in the last three months.

The government is also expecting new bitcoin investments that will bring more bitcoin supporters to the country. Milena Mayorga, ambassador of El Salvador in the US, recently announced that Bank Of The Future, a cryptocurrency investment platform, was going to invest $6 billion in the country.

What do you think about Nayib Bukele’s view of the influence of Bitcoin on the growth of the tourism industry in El Salvador? Tell us in the comments section below.

Coinbase facing class-action lawsuit amidst SEC investigation

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