Coinbase runs into trouble over New York and California regulatory status
30 January 2015 | 8690 views | 0
Coinbase is being sized up for a class action suit by securities litigators Tripp Levy for allegedly making false and misleading statements relating to the regulatory status of its new bitcoin exchange in New York and California.
Earlier this week, Coinbase launched what it called America's first regulated bitcoin exchange, promising that the platform would immediately be available to users in 24 US states and territories.
However, Matthew Anderson, a spokesman for Benjamin Lawsky, the superintendent of the state’s Department of Financial Services, has told the New York Times that the regulator has not issued Coinbase was a license. Bitcoin firms in New York currently need a money transmission license but will soon have to get a dedicated 'BitLicense'.
In addition, the California Department of Business Oversight has issued a statement to "correct erroneous reports that Coinbase Exchange has received regulatory approval from the State".
When news broke of the Coinbase exchange, bitcoin's price saw a sharp rise, hitting $263. Law firm Tripp Levy says that the company's initial statement may have "artificially inflated" the cryptocurrency's price, which later fell as the New York and California news emerged.
Tripp Levy, which specialises in running class action and private suits over misleading corporate filings, says it is "investigating Coinbase, Inc. for allegedly making false and misleading statements to prospective and current users of Coinbase's Bitcoin Exchange regarding its business".