On Thursday, July 30, 2026, Hoodline reported that Coinbase secured a significant but partial victory in a long-running lawsuit over allegations that the cryptocurrency exchange sold unregistered digital-asset securities to customers.
U.S. District Judge Paul Engelmayer, presiding in Manhattan federal court, dismissed claims tied to the vast majority of customer trades but ruled that Coinbase qualifies as a “statutory seller” for a narrower category of transactions—those filled directly from the company’s own inventory rather than matched between users.
The lawsuit, filed in 2021, involves customers who purchased more than 60 different tokens through Coinbase, including XRP and Dogecoin. Plaintiffs argued the exchange illegally facilitated the sale of unregistered securities.
According to Reuters, Coinbase had argued in court filings that approximately 99.97% of its trading volume came from orders matched between users on its platform, rather than from the company’s own holdings. The exchange said trades filled from inventory occurred only in limited situations, such as during platform disruptions or when orders fell below minimum trade thresholds.
Coinbase’s court filings characterized the matched trades as representing hundreds of billions of dollars in volume, while inventory-based transactions accounted for at least $178 million in sales. Despite the comparatively small scale of those inventory trades, Judge Engelmayer’s ruling determined that Coinbase could be held liable as a statutory seller for that category of activity, opening a potential avenue for customers to pursue claims.
The case centers on Section 12(a)(1) of the Securities Act, which allows for liability against parties that directly transfer title to a security or solicit its purchase for financial gain. Engelmayer had previously declined to dismiss the case at the pleadings stage, instead allowing the statutory-seller question to proceed through discovery.
The Digital Chamber, an industry trade group backing Coinbase, told Reuters that a broad interpretation of “statutory seller” status could hinder innovation across the crypto sector.
The ruling comes after the Securities and Exchange Commission dropped a separate enforcement action against Coinbase in February 2025.
While Thursday’s decision eliminates the bulk of the Manhattan customer lawsuit, it leaves intact the portion concerning transactions in which Coinbase supplied tokens from its own inventory, meaning litigation over the company’s token sales practices is not yet over.
Source: Hoodline
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