A US federal judge ruled that Coinbase must face a lawsuit from customers who claim the platform unlawfully sold securities without proper registration.

This decision was made by District Judge Paul Engelmayer in Manhattan on Feb. 7.

The judge rejected Coinbase’s argument that it was not a “statutory seller” under federal securities law.

Engelmayer found that Coinbase acted as the sole transacting party, making it a seller under relevant laws.

Claims under state laws in California, Florida, and New Jersey will also proceed.

The case, initially dismissed in February 2023, was partially revived in April 2024 by the 2nd US Circuit Court of Appeals in Manhattan.

Separately, Coinbase is facing legal action from the US Securities and Exchange Commission (SEC), which alleges the exchange enabled trading of unregistered securities.

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