Coinbase Sued Over XRP Commissions After SEC Pursues Ripple

Photographer: Michael Short/Bloomberg

Coinbase Inc. knew cryptocurrency XRP was a security rather than a commodity and “illegally” sold Ripple Labs Inc.’s tokens anyway, a customer argues in a proposed class-action lawsuit over the commissions the crypto exchange collected.

Coinbase said this week it will stop selling XRP to the public after the U.S. Securities and Exchange Commission sued Ripple, alleging it misled investors by selling more than $1 billion of the virtual tokens for the world’s third-largest cryptocurrency without registering with the agency. Other exchanges are also suspending XRP sales to U.S. customers.

The lawsuit comes about two weeks after Coinbase, the biggest cryptocurrency exchange in the U.S., filed to go public. It’s expected to be the U.S.’s first crypto-related initial public offering, a watershed moment for the industry in gaining mainstream recognition. Meanwhile, Bitcoin is trading at all-time highs, having almost reached $29,000.