A federal judge on Thursday dismissed the majority of a class-action lawsuit that accused Coinbase of illegally selling unregistered securities. The lawsuit, brought by customers, claimed the exchange was operating as an unregistered broker-dealer.
U.S. District Judge Paul Engelmayer in Manhattan ruled that for most transactions on the platform, where customer orders are matched, Coinbase does not qualify as a "statutory seller" of the tokens. These matched trades represent over 99% of Coinbase's trading volume. However, the judge allowed a smaller portion of the lawsuit to proceed, specifically concerning trades where Coinbase sold tokens directly from its own inventory.