Lawyers for the customers did not immediately respond to requests for comment. Coinbase and its lawyers did not immediately respond to similar requests.
Like other cryptocurrency industry participants, Coinbase has seen a rollback of regulatory oversight under the second Trump administration.
Digital Chamber, a cryptocurrency trade group, supported Coinbase, saying an expansive definition of statutory seller could stifle innovation and drive trading volume to non-U.S. exchanges.
Last year, the U.S. Securities and Exchange Commission ended a lawsuit it brought in 2023 that accused Coinbase of allowing trading in tokens that should have been registered as securities.
Judge dismisses most claims over matched transactions
Coinbase won the dismissal on Thursday of much of a lawsuit in which customers accused the largest U.S. cryptocurrency exchange of illegally selling securities without registering as an exchange or broker-dealer.
Customers sued over 60 tokens, including XRP and dogecoin, that they claimed were unregistered securities, seeking unspecified damages in the proposed class action.
U.S. District Judge Paul Engelmayer in Manhattan dismissed all claims based on "matched" transactions where Coinbase paired customers' buy and sell orders. These accounted for an estimated 99.97% of trading volume, equal to hundreds of billions of dollars.
The judge also said customers may pursue claims over "inventory" transactions, where Coinbase fills orders from tokens it owns. These accounted for the remaining trading volume, comprising at least $178 million in sales.
Court finds Coinbase was a statutory seller for inventory trades
The lawsuit's outcome turned on whether Coinbase qualified as a statutory seller under the federal Securities Act of 1933 and state "blue sky" laws designed to prevent fraudulent securities sales.
Engelmayer said Coinbase was not a statutory seller for matched transactions because it did not pass ownership of tokens to buyers, and did not induce, or "solicit," the transactions merely by providing basic overviews of tokens and their price histories.
Coinbase was a statutory seller for inventory transactions, however, because it passed title of tokens to buyers, and acted as a dealer and underwriter, Engelmayer said.
The lawsuit began in 2021. Engelmayer dismissed other federal securities law claims in 2023.
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