08/25/2026
On August 18, 2026, U.S. District Judge Brian R. Martinotti of the District of New Jersey denied Coinbase’s motion to dismiss a shareholder class action against the world’s largest crypto exchange. This was Coinbase’s third dismissal motion in this long-running securities class action led by Lead Plaintiff Sjunde AP-Fonden (AP7), one of Sweden’s largest pension funds. The motion followed the filing of an amended complaint in October 2025.
Plaintiffs allege that Coinbase, its CEO Brian Armstrong, and other senior executives failed to disclose the true regulatory risks facing the nascent crypto platform, including the likelihood that the SEC would pursue an enforcement action against Coinbase for failing to register the digital assets it lists as securities with the Commission. In June 2023, when the SEC filed an enforcement action against Coinbase, the company’s stock tumbled, causing massive investor losses.
In denying Coinbase’s motion, Judge Martinotti underscored the plaintiffs’ allegations of insider trading. The Court found that the amended complaint submits facts that “support the assertion defendants had motive to engage in wrongful conduct at the time of the allegedly misleading statements – the reaping of billions of dollars in financial benefits by cashing out existing shares at inflated values following Coinbase’s public listing before the public could learn about the risks associated with a potential bankruptcy and/or an [SEC] enforcement action.” The case, pending since 2023, will now proceed to discovery.
The KTMC team representing plaintiffs includes Matthew Mustokoff, Stacey Kaplan, Margaret Mazzeo, and Joshua Materese.
