Cryptocurrency exchange Coinbase, and CEO Brian Armstrong, face a new class-action lawsuit.

A group of plaintiffs from California and Florida filed a lawsuit in the U.S. District Court for the Northern District of California, San Francisco Division.

The plaintiffs — Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard — allege that Coinbase’s sales of digital assets have knowingly violated state securities laws since the company’s inception.

The lawsuit claims that several tokens sold on Coinbase, such as Solana (SOL), Polygon (MATIC), Near Protocol (NEAR), Decentraland (MANA), Algorand (ALGO), Uniswap (UNI), Tezos (XTZ), and Stellar Lumens (XLM), should be classified as securities.

According to the plaintiffs, Coinbase has admitted to being a “Securities Broker” in its user agreement, suggesting that the digital asset sales on the platform may qualify as investment contracts or other forms of securities.

The lawsuit also contends that Coinbase’s Prime brokerage functions as a securities broker.

The plaintiffs are seeking full rescission of these sales, statutory damages under state laws, and injunctive relief, with the matter proceeding to a jury trial. This lawsuit bears similarities to another class-action suit alleging consumer harm from Coinbase’s sale of securities.

Coinbase, however, has pushed back, arguing that secondary sales of crypto assets do not meet the criteria for securities transactions and questioning the applicability of securities regulations in this context.

This case is separate from Coinbase’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), which also examines whether the tokens sold on Coinbase should be treated as securities. Recently, Coinbase filed an interlocutory appeal in response to a judge’s ruling allowing the SEC’s case to proceed.

Crypto.news reached out to Coinbase for comment but has not heard back.

Coinbase faces multiple lawsuits

In a separate development, pro-crypto lawyer John Deaton has stepped in to support Coinbase in its legal battle with the SEC by filing an amicus brief.

Deaton, known for his crypto advocacy and campaign against Massachusetts Senator Elizabeth Warren, is said to be providing his services pro bono.

His involvement coincides with Coinbase’s pushback against the SEC’s allegations and its efforts to gain clarity on regulatory matters, illustrating the ongoing tensions between cryptocurrency companies and financial regulators.

In June 2023, the SEC filed a lawsuit against Coinbase, accusing the cryptocurrency exchange of operating as an unregistered national securities exchange and broker. 

The SEC claims that Coinbase traded at least 13 crypto assets that should have been registered as securities, including tokens like Solana, Cardano, and Polygon.

Separately, hundreds of Coinbase customers have sued the company over its handling of the GYEN stablecoin, which they argue was far from stable.

This lawsuit alleges that Coinbase promoted and traded the GYEN token despite being aware of its high volatility, leading to significant losses for investors.

Coinbase’s crypto staking program has also come under regulatory scrutiny. The SEC alleges that the program operates as an unregistered investment contract and security. Several U.S. states have joined the SEC’s case, accusing Coinbase of violating securities laws in connection with its staking rewards program.

Coinbase has pushed back against the regulatory crackdown. Armstrong has expressed pride in representing the crypto industry in court and has called for clearer regulations.

However, legal experts caution that the SEC’s actions could limit options for U.S. investors and increase fees as platforms turn to less-regulated markets.

These lawsuits reflect the ongoing tensions between cryptocurrency companies and financial regulators over how to classify and oversee digital assets. As the SEC intensifies its crypto enforcement, further legal battles are likely for Coinbase and other major players in the industry.

SAN FRANCISCO (AP) — Wearing a bright safety vest with the words “Safe Passage” on the back, Tatiana Alabsi strides through San Francisco’s Tenderloin neighborhood to its only public elementary school, navigating broken bottles and stained sleeping bags along tired streets that occasionally reek of urine.

Along the way in one of America’s most notorious neighborhoods, she calls out to politely alert people huddled on sidewalks, some holding strips of tin foil topped with illicit drugs.

“Good afternoon, happy Monday!” Alabsi says to two men, one slumped forward in a wheelchair and wearing soft hospital socks and one slipper. Her voice is cheerful, a soothing contrast to the misery on display in the 50-block neighborhood that’s well-known for its crime, squalor and reckless abandon. “School time. Kids will be coming soon.”

Further along, Alabsi passes a man dancing in the middle of the street with his arms in the air as a squealing firetruck races by. She stops to gently touch the shoulder of a man curled up in the fetal position on the sidewalk, his head inches from the tires of a parked car.

“Are you OK?” she asks, before suggesting he move to a spot out of the sun. “Kids will be coming soon.”

Minutes later, Alabsi arrives at the Tenderloin Community Elementary School, where she is among several adults who escort dozens of children to after-school programs. The students hitch up backpacks emblazoned with Spider Man and the sisters of “Frozen,” then form two rambunctious lines that follow Alabsi like ducklings through broken streets.

The smallest ones hold hands with trusted volunteers.

Long known for its brazen open-air drug markets, chronic addiction, mental illness and homelessness, the Tenderloin neighborhood is also home to the highest concentration of kids in San Francisco, an estimated 3,000 children largely from immigrant families.

The neighborhood is rich with social services and low-income housing but the San Francisco Police Department also has seized nearly 200 kilograms (440 pounds) of narcotics in the area since last May. Of a record 806 overdose fatalities last year, about 20% were in the Tenderloin.

But amid the chaos is a vibrant community stitched together by differing languages that has found ways to protect its most vulnerable and deliver hope, something many say the city has failed to do. Officials have sent in toilets, declared a mayoral emergency and vowed to crack down on drugs, but change is glacial.

A group of mothers fed up with drug dealers started the efforts in 2008 after a child temporarily went missing. The Safe Passage program is now part of the Tenderloin Community Benefit District, a nonprofit funded in part by Tenderloin property owners who also cleans sidewalks, staffs parks and hosts community events.

Alabsi started as a volunteer after the Russian native moved to the United States from Yemen with her husband and sought asylum a decade ago. They joined her husband’s mother and his siblings, who had settled in the Tenderloin.

Life was not easy in their new homeland. Alabsi, 54, and her husband Jalal, both medical doctors, had to start over years into their careers. The mother of two despaired when her younger son began to count poop piles he spotted from his stroller on their walks home from daycare.

Then she learned of Safe Passage. At her husband’s urging, she signed up to volunteer to help spare the children the worst sights on their walk after school.

Many people, Alabsi says, respond politely or tuck away their drugs or scoot their belongings out of the way when she reminds them that school time is over. But others ignore the request. Some even get angry.

“It’s better to give nice smile and say good afternoon or good morning, to show people I am friendly,” said a laughing Alabsi, who is fluent in Arabic and Russian and speaks English with an accent. “I am not monster.”

The program’s safety stewards guide the students along the cleanest and calmest routes, redirecting them to avoid people acting erratically or overdosing. Sometimes stewards use their bodies to block the children from seeing things they shouldn’t, like a woman crouched between two cars, no longer able to control her bowels.

On a recent afternoon, two girls with ponytails sashayed across an intersection, talking about becoming TikTok stars one day, seemingly oblivious to a couple hunched over at a bus stop across the street, struggling to light up. As they walked, Alabsi blocked their view of smeared feces.

The girls, one in first grade and the other in second, were headed to the Cross Cultural Family Center, one of some half-dozen nonprofits that provide after-school programs for the K-5 kids.

Alabsi and her immediate family moved out of the Tenderloin but are still an integral part of it. Their son is in the elementary school’s fourth grade and Alabsi now manages the Safe Passage program.

She loves the mix of Latin, Asian, Arab and American cultures in the Tenderloin. The big hearts of residents who are striving for a better life is what “makes it special,” she said.

One recent Saturday, Alabsi worked at an Eid celebration at the neighborhood’s recreation center. She helped monitor the block that was closed to traffic for the day while greeting her sisters-in-laws, who had joined the festivities with their children.

When the celebration ended at 4 p.m., she left with her soccer-loving son, Sami, to drop off her vest and radio at the office. They chatted in Russian as they passed tents, sleeping bags and blankets, an abandoned microwave and lawn chair and a human-shaped lump under a blanket, shoes peeking out.

From loud speakers, the doo-wop of The Moonglows singing “Sincerely” soared prettily over gritty streets. On a pole was a flyer with photos of a missing daughter: “Mimi please call home,” read the April notice. “You are so loved.”

“We can change world in better way by our presence, by our examples, by our positive attitude,” Alabsi said. “Every year it’s little bit better and better and better.”

___

Associated Press journalist Terry Chea contributed to this report.

SAN FRANCISCO — For ten years, the Bay Bridge lights brought a sparkle to San Francisco’s skyline.

The feeling that came along with looking up at them was one of awe, said Ben Davis, the founder and Chief Visionary Officer of Illuminate, the art nonprofit behind the installation

“It just makes you want to reach out and grab the hand of the person next to you – it doesn’t make a difference who they are,” he said. “There is something that really brings us into a sense of humility through awe that unleashes the better nature of our character.”

But the lights had to go dark in 2023.

“I feel like there is a hole in the night sky, and there has been for the past year,” Davis said.

The lights first lit up in 2013. What was originally meant to be a two-year art display ended up turning into 10 years. But, over time, many of the lights lost their luster.

“The Bay Bridge is a really harsh environment for electronics. So, they were suffering,” Davis said. “Really, rather than letting them decay into oblivion, which is a bad look for San Francisco, we did the responsible thing: We took them down and set about bringing them back in a new configuration – really designed to do well over time on this side of the Bay Bridge.”

Now dubbed “Bay Lights 360,” the new public art installation with have around 50,000 LED lights – about double the original number – and better visibility.

“We’re going to wrap both sides of the cable so people can see it not just from San Francisco and the North Bay – but as a matter of aesthetic equity, to communities all around the Bay,” Davis said.

The revamp was made possible after the art nonprofit’s successful fundraising campaign.

“We’ve received $10 million in major gifts to bring the artwork back, which is exciting. We’re actually at $10.5 million raised so far. The $11th million we are raising through not major gifts, but actually just through crowdfunding,” Davis said.

Davis said the contributions came from people, not government organizations or corporations. 

“We didn’t seek any city funds because we really didn’t want to rob the public art community in San Francisco and other organizations that could use it more,” he said. “I have deep faith and love for the place in which we live, and I find it an honor to have gestures like the Bay Lights manifest in the world with the help of thousands of people bringing together this culture of generosity to make it happen.”

He said they’re working on building the materials now and will begin installing the lights in the fall. The plan is to have them shining again sometime around March of 2025.