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It is a well-known fact by now that Ripple is in trouble with the US SEC, which recently filed a lawsuit against the crypto startup for selling unregistered securities. However, Ripple is not the only one who got in trouble for XRP, as Coinbase now also faces a lawsuit for alleged violation of unfair competition laws.
A new lawsuit claims Coinbase knew XRP was a security
According to the new lawsuit in California, Coinbase made a commission from the sale of XRP, thus violating the law. The lawsuit was not filed by the US regulator, however.
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Instead, it comes from Thomas Sandoval, who accused the largest US exchange of profiting from the sale of XRP.
To make matters worse, Sandoval claims that Coinbase did it knowingly, being perfectly aware that XRP was a security. He argues that the exchange should have had the knowledge, given the fact that it was aware that all nodes are under Ripple’s control.
Based on this, the lawsuit further claims that Coinbase broke the US State’s unfair competition law. Essentially, it profited off of the sale of XRP, all the while knowing that the asset was a security.
Coinbase washes its hands of Ripple and XRP
Coinbase has not responded to the allegations publicly as of yet, so it remains unknown what the company and its executives think about the new development. The company never stated that the coin is a security, and while that does not indicate that it was not aware of that — it would be a big risk for the firm to take part in the sale of unregistered securities knowingly.
After all, there was always a chance that the US SEC would take a closer look at XRP and discover the truth, in which case Coinbase would have been in trouble. As some may know, unfair competition law protects against fraudulent or deceptive business practices and false advertising.
Regardless of what the truth may be, Coinbase appears to be ready to distance itself from Ripple and XRP. It is among many exchanges that have announced plans to delist the coin in the near future, following the SEC’s lawsuit.