Underwood et al v. Coinbase Global, Inc.
Case Summary
On October 8, 2021, Christopher Underwood, Louis Oberlander and Zeneyda Patin (collectively, “Plaintiffs”), individually and on behalf of all others similarly situated, represented by Ian Wise Sloss of Silver Golub & Teitell LLP, filed a civil action against Coinbase Global, Inc. (“Coinbase” or “Defendant”), seeking declaratory and injunctive relief along with damages, pre-judgment and post-judgment interest, restitution, rescission, disgorgement, and attorneys’ fees and costs for the Defendant’s alleged concealment of the nature of the Digital Asset Securities listed on the Coinbase Digital Asset Platforms and further concealing that the Coinbase Digital Asset Platforms are “exchanges.” This case was filed in U.S. District Court for the Southern District of New York with Judge Paul A. Engelmayer presiding.
On February 1, 2023, the Court granted the motion to dismiss brought by Brian Armstrong, Coinbase Global, Inc., and Coinbase, Inc. The Court dismissed the federal claims brought by the plaintiffs with prejudice, including claims for damages arising from Coinbase’s alleged sale or solicitation of securities under Section 12(a)(1) of the Securities Act of 1933, as well as claims for allegedly illegal contracts Coinbase entered into with its users to purchase and sell securities in alleged violation of the registration requirements of Section 29(b) of the Exchange Act. The court further dismissed the state claims brought by Plaintiffs without prejudice, including allegations that Coinbase sold unregistered securities and failed to register as a broker-dealer.
Case Complaint Summary
In the complaint, Plaintiffs alleged that “Coinbase operates two digital asset trading platforms: Coinbase and Coinbase Pro (the “Coinbase Digital Asset Platforms”) that each and together meet the definition of an 'exchange' under federal securities laws. The Coinbase Digital Asset Platforms, at the agreement of its users (1) bring together the orders for digital assets that are investment contracts, and therefore securities ('Digital Asset Securities'), of multiple buyers and sellers; and (2) use established, non-discretionary methods under which Coinbase Digital Asset Platforms users’ orders interact with each other.”
The plaintiffs further alleged, “Despite the fact that the Coinbase Digital Asset Platforms, as operated by Defendant Coinbase, meet the definition of an 'exchange' under federal securities laws, Coinbase has not registered the Coinbase Digital Asset Platforms as national securities exchanges, nor does Coinbase operate the Coinbase Digital Asset Platforms pursuant to an exemption from registration. Coinbase’s failure to so register is therefore a violation of Section 5 of the Exchange Act.”
Plaintiffs presented four claims for relief, including claims for alleged violations of Sections 5, 29(b), 15(a)(1), and 29(b) of the Exchange Act; transacting business as an unlicensed broker-dealer in violation of Cal. Corp. Code § 25501.5(a); and transacting business as an unregistered dealer Fla. Stat. § 517.2111.
In the prayer for relief, the plaintiffs requested an order certifying this action and the Class and Subclasses requested herein as a class action, and declaring that Defendant’s actions constitute violations of the federal and state laws set forth above and that Defendant is liable to Plaintiffs, the Class, and the Subclasses for damages. Plaintiffs also requested an injunction enjoining Defendant from offering the Digital Asset Securities for purchase or sale on the Coinbase Digital Asset Platforms without having registered the Coinbase Digital Asset Platforms as national securities exchanges or broker-dealers as required by the federal securities laws. Further, the plaintiffs requested an award of appropriate damages, rescission, restitution, disgorgement, and pre- and post-judgment interest with costs of litigation.
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Case Details
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Case Number:
1:21-cv-08353
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Filing Date:
10/08/2021
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Case Status:
Open
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Case Type:
Civil - Securities and Financial Instruments
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Court:
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Courthouse :
Judge Details
Presiding Judge
Paul A. Engelmayer
Party Details
Plaintiffs
CHRISTOPHER UNDERWOOD
LOUIS OBERLANDER
ZENEYDA PATIN
Henry Rodriguez
Defendants
COINBASE GLOBAL, INC.
Coinbase, Inc.
Brian Armstrong
Attorney/Law Firm Details
Plaintiff Attorneys
Ian Wise Sloss
Mitchell D. Nobel
Steven Lawrence Bloch
Jordan Ari Goldstein
Defendant Attorneys
Lara A. Flath
Alexander C Drylewski
Abigail Elizabeth Davis
Jay B. Kasner
Court Documents
(#96) CERTIFICATE OF SERVICE of Notice of Initial Pretrial Conference, Dkt. No 95 served on Jay B. Kasner on February 7, 2025. Service was made by Mail. Document filed by Christopher Underwood, Louis Oberlander, Henry Rodriguez..(Goldstein, Jordan) (Entered: 02/07/2025)
(#95) NOTICE OF INITIAL PRETRIAL CONFERENCE: Initial Conference set for 3/5/2025 at 10:00 AM in Courtroom 1305, 40 Centre Street, New York, NY 10007 before Judge Paul A. Engelmayer. (Signed by Judge Paul A. Engelmayer on 2/7/2025) (tg) (Entered: 02/07/2025)
(#94) OPINION AND ORDER re: #90 LETTER MOTION for Oral Argument ECF No. #82 addressed to Judge Paul A. Engelmayer from Lara A. Flath dated October 28, 2024. filed by Coinbase, Inc., Brian Armstrong, COINBASE GLOBAL, INC., Coinbase Global, Inc., #82 MOTION for Judgment on the Pleadings . filed by Coinbase, Inc., Brian Armstrong, COINBASE GLOBAL, INC., Coinbase Global, Inc.. For the foregoing reasons, the Court denies Coinbase's motion for judgment on the pleadings. By separate order today, the Court will schedule an initial pretrial conference for March 5, 2025. The Court directs the parties to file, by March 3, 2025, a proposed case management plan. The Court's determination is to front-load resolution of the statutory seller issue, given the potential for the resolution of that issue to resolve the outstanding claims. Accordingly, the parties' proposed management plan should provide for a bifurcation of discovery, with full discovery on that issue proceeding first, followed by summary judgment motion(s) on that issue, and with discovery and motions on other issues deferred until motions on the statutory seller issue have been resolved. The Clerk of Court is respectfully directed to terminate the motions pending at dockets 82 and 90. SO ORDERED. (Signed by Judge Paul A. Engelmayer on 2/7/2025) (tg) (Entered: 02/07/2025)
(#93) LETTER addressed to Judge Paul A. Engelmayer from Lara A. Flath dated December 30, 2024 re: Individual Rule 3(J). Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 12/30/2024)
(#92) RESPONSE re: #91 Letter . Document filed by Christopher Underwood, Louis Oberlander, Henry Rodriguez..(Goldstein, Jordan) (Entered: 12/02/2024)
(#91) LETTER addressed to Judge Paul A. Engelmayer from Lara A. Flath dated November 27, 2024 re: Supplemental Authority. Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 11/27/2024)
(#90) LETTER MOTION for Oral Argument ECF No. #82 addressed to Judge Paul A. Engelmayer from Lara A. Flath dated October 28, 2024. Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 10/28/2024)
(#89) REPLY MEMORANDUM OF LAW in Support re: #82 MOTION for Judgment on the Pleadings . . Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 10/28/2024)
(#89) REPLY MEMORANDUM OF LAW in Support re: #82 MOTION for Judgment on the Pleadings . . Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 10/28/2024)
(#6) NOTICE OF APPEARANCE by Jay B. Kasner on behalf of Coinbase Global, Inc...(Kasner, Jay) (Entered: 11/01/2021)
Z PATIN CERTIFICATION
L OBERLANDER CERTIFICATION
C UNDERWOOD CERTIFICATION
Main Document
Docket Entries
Docket(#96) CERTIFICATE OF SERVICE of Notice of Initial Pretrial Conference, Dkt. No 95 served on Jay B. Kasner on February 7, 2025. Service was made by Mail. Document filed by Christopher Underwood, Louis Oberlander, Henry Rodriguez..(Goldstein, Jordan) (Entered: 02/07/2025)
[-] Read LessDocket(#95) NOTICE OF INITIAL PRETRIAL CONFERENCE: Initial Conference set for 3/5/2025 at 10:00 AM in Courtroom 1305, 40 Centre Street, New York, NY 10007 before Judge Paul A. Engelmayer. (Signed by Judge Paul A. Engelmayer on 2/7/2025) (tg) (Entered: 02/07/2025)
[-] Read LessDocket(#94) OPINION AND ORDER re: #90 LETTER MOTION for Oral Argument ECF No. #82 addressed to Judge Paul A. Engelmayer from Lara A. Flath dated October 28, 2024. filed by Coinbase, Inc., Brian Armstrong, COINBASE GLOBAL, INC., Coinbase Global, Inc., #82 MOTION for Judgment on the Pleadings . filed by Coinbase, Inc., Brian Armstrong, COINBASE GLOBAL, INC., Coinbase Global, Inc.. For the foregoing reasons, the Court denies Coinbase's motion for judgment on the pleadings. By separate order today, the Court will schedule an initial pretrial conference for March 5, 2025. The Court directs the parties to file, by March 3, 2025, a proposed case management plan. The Court's determination is to front-load resolution of the statutory seller issue, given the potential for the resolution of that issue to resolve the outstanding claims. Accordingly, the parties' proposed management plan should provide for a bifurcation of discovery, with full discovery on that issue proceeding first, followed by summary judgment motion(s) on that issue, and with discovery and motions on other issues deferred until motions on the statutory seller issue have been resolved. The Clerk of Court is respectfully directed to terminate the motions pending at dockets 82 and 90. SO ORDERED. (Signed by Judge Paul A. Engelmayer on 2/7/2025) (tg) (Entered: 02/07/2025)
[-] Read LessDocket(#93) LETTER addressed to Judge Paul A. Engelmayer from Lara A. Flath dated December 30, 2024 re: Individual Rule 3(J). Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 12/30/2024)
[-] Read LessDocket(#92) RESPONSE re: #91 Letter . Document filed by Christopher Underwood, Louis Oberlander, Henry Rodriguez..(Goldstein, Jordan) (Entered: 12/02/2024)
[-] Read LessDocket(#91) LETTER addressed to Judge Paul A. Engelmayer from Lara A. Flath dated November 27, 2024 re: Supplemental Authority. Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 11/27/2024)
[-] Read LessDocket(#90) LETTER MOTION for Oral Argument ECF No. #82 addressed to Judge Paul A. Engelmayer from Lara A. Flath dated October 28, 2024. Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 10/28/2024)
[-] Read LessDocket(#89) REPLY MEMORANDUM OF LAW in Support re: #82 MOTION for Judgment on the Pleadings . . Document filed by Coinbase, Inc., Brian Armstrong, Coinbase Global, Inc...(Flath, Lara) (Entered: 10/28/2024)
[-] Read LessDocket(#88) NOTICE of Supplemental Authority. Document filed by Christopher Underwood, Louis Oberlander, Henry Rodriguez. (Attachments: #1 Exhibit A- Hardin v. Tron Foundation).(Goldstein, Jordan) (Entered: 10/26/2024)
[-] Read LessDocket(#87) NOTICE OF APPEARANCE by Corey Stoughton on behalf of Louis Oberlander, Henry Rodriguez, Christopher Underwood..(Stoughton, Corey) (Entered: 09/30/2024)
[-] Read LessDocket(#6) NOTICE OF APPEARANCE by Jay B. Kasner on behalf of Coinbase Global, Inc...(Kasner, Jay) (Entered: 11/01/2021)
[-] Read LessDocket(#5) AFFIDAVIT OF SERVICE of Summons and Complaint,. Coinbase Global, Inc. served on 10/13/2021, answer due 11/3/2021. Service was accepted by PATRICK DUFFY, REGISTERED AGENT. Document filed by Christopher Underwood; Zeneyda Patin; Louis Oberlander..(Sloss, Ian) (Entered: 10/15/2021)
[-] Read LessDocket(#4) ELECTRONIC SUMMONS ISSUED as to Coinbase Global, Inc...(gp) (Entered: 10/12/2021)
[-] Read LessDocketCase Designated ECF. (gp) (Entered: 10/12/2021)
[-] Read LessDocketMagistrate Judge Debra C. Freeman is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (gp) (Entered: 10/12/2021)
[-] Read LessDocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Paul A. Engelmayer. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(gp) (Entered: 10/12/2021)
[-] Read LessDocket***NOTICE TO ATTORNEY REGARDING PARTY MODIFICATION. Notice to attorney Ian Wise Sloss. The party information for the following party/parties has been modified: All parties. The information for the party/parties has been modified for the following reason/reasons: party name was entered in all caps. (gp) (Entered: 10/12/2021)
[-] Read LessDocket(#3) REQUEST FOR ISSUANCE OF SUMMONS as to COINBASE GLOBAL, INC., re: #1 Complaint,. Document filed by LOUIS OBERLANDER, ZENEYDA PATIN, CHRISTOPHER UNDERWOOD..(Sloss, Ian) (Entered: 10/10/2021)
[-] Read LessDocket(#2) CIVIL COVER SHEET filed..(Sloss, Ian) (Entered: 10/08/2021)
[-] Read LessDocket(#1) COMPLAINT against COINBASE GLOBAL, INC.. (Filing Fee $ 402.00, Receipt Number ANYSDC-25175095)Document filed by CHRISTOPHER UNDERWOOD, ZENEYDA PATIN, LOUIS OBERLANDER. (Attachments: #1 C UNDERWOOD CERTIFICATION, #2 L OBERLANDER CERTIFICATION, #3 Z PATIN CERTIFICATION).(Sloss, Ian) (Entered: 10/08/2021)
[-] Read LessSearch Court Records
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