27/09/2022

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Coinbase (COIN) sued for crypto currency transfer technology patent infringement

One of the largest cryptocurrency platforms, Coinbase, faces a lawsuit over patent infringement.

Coinbase, one of the world’s largest cryptocurrency exchanges, faces a patent infringement lawsuit related to transfer technology. The lawsuit was filed in Delaware federal court by Veritaseum Capital LLC. 

Screenshot of Veritaseum's VERI token which has fallen a lot since peaking late in 2021.
The VERI token has fallen quite a bit since peaking in late 2022.
Source: Coinbase

The lawsuit claims that Coinbase infringed a patent that was awarded to Veritaseum founder Reggie Middleton by the U.S. Patent and Trademark Office in December 2021. Middleton and Veritaseum paid more than $9 million to settle SEC charges related to a “fraudulent scheme” to sell VERI tokens in 2017 and 2018. Veritaseum and Middleton claimed in 2019 that VERI tokens were not securities and denied any fraudulent statements were made.

Veritaseum’s lawyer said that Coinbase was “uncooperative” when the company attempted to settle this issue outside of the courts. Veritaseum’s website claims that the company “builds blockchain-based, peer-to-peer capital markets as software on a global scale.” The current patent infringement lawsuit claims that Coinbase’s website, app, Pay, Wallet, and Cloud services all infringe on a patent covering a secure method of digital-currency transactions.

Coinbase's stock chart shows how the shares have been a world of pain for shareholders.
Coinbase’s stock is down 85% since hitting an all-time high in its first week of trading last year.
Source: TC2000

Coinbase has found itself at the center of several legal issues, with the SEC still probing the company over digital asset trading. COIN shareholders have been in a world of pain for the past year as the stock has tanked over 85% during the so-called “crypto winter.”

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