San Francisco-based Coinbase has been hit with a class action lawsuit over receiving commissions from illicit XRP sales.
The plaintiff, Thomas Sandoval, alleges that the number one U.S. cryptocurrency exchange knew that XRP was a security under federal securities laws but chose to continue to offer the token to its customers and charge commissions from trades.
In his complaint, Sandoval further claims that Coinbase gained "an unwarranted competitive advantage" over other digital assets that only sold commodities.
The timing of the lawsuit is notable since the $8 billion exchange is on the verge of its landmark initial public offering that is slated for 2021.
Alex DovbnyaEarlier this week, Coinbase announced that it would suspend XRP trading in January after the U.S. Securities and Exchange Commission (SEC) took Ripple to court on Dec. 22.
The blockchain company owns nearly half of the token's total supply.
Vladislav Sopov
Dan Burgin
U.Today Editorial Team