The judge ruled that Coinbase must face a lawsuit from customers accusing it of illegally selling securities

ChainCatcher news, according to a report by Reuters, on Friday, a U.S. federal judge ruled that the cryptocurrency exchange Coinbase must face a lawsuit from customers who accuse the exchange of illegally selling securities without being registered as a broker-dealer. U.S. District Judge Paul Engelmayer in Manhattan dismissed Coinbase's argument that it did not qualify as a "statutory seller" under federal securities law because it never transferred ownership of the 79 tokens involved in customer transactions. The judge cited the allegations: "Customers on Coinbase only transact with Coinbase itself," which is sufficient to conclude that Coinbase is a seller.

Engelmayer also refused to dismiss the claims brought under the laws of California, Florida, and New Jersey, stating that customers have sufficiently alleged that Coinbase is a direct seller of these tokens. Coinbase stated in a statement: "Coinbase does not list, offer, or sell securities on its exchange. We look forward to defending against the remaining allegations in district court."