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Coinbase to Face Narrowed Shareholder Lawsuit After Judge’s Partial Dismissal

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A U.S. federal judge has ruled that Coinbase must face a narrowed shareholder lawsuit alleging it misled investors about key business risks, including the likelihood of being sued by the Securities and Exchange Commission (SEC).

In a 59-page ruling issued Tuesday night, Judge Brian Martinotti of the U.S. District Court in New Jersey rejected Coinbase’s bid for a full dismissal of the case. The lawsuit accuses the cryptocurrency exchange and several of its top executives and board members of fraudulently concealing regulatory and financial risks in public statements over a two-year period.

The shareholders allege Coinbase made misleading claims suggesting it was unlikely to face SEC enforcement, and that customer assets would remain protected even if the company filed for bankruptcy. These statements, made through earnings calls, regulatory filings, blog posts, and social media, allegedly inflated investor confidence.

Judge Martinotti ruled that plaintiffs could not proceed based solely on “group pleading”, where statements in company-wide documents do not specify individual responsibility. However, he allowed the lawsuit to continue for claims where investors provided specific allegations tied to individual defendants, writing, “Where plaintiffs have appropriately provided defendant-by-defendant particularity, the claims must remain.”

In a notable aside, Martinotti criticized the lack of clarity in the plaintiffs’ filings, remarking humorously, “Judges are not like pigs, hunting for truffles buried in briefs.”

Coinbase called the ruling a “significant step forward,” saying it would continue to “vigorously defend against any remaining claims.” Attorneys representing the shareholders did not immediately respond to media requests.

The case stems from major stock drops in 2022 and 2023, including a 26% plunge on May 11, 2022 after Coinbase reported disappointing revenues and added new risk disclosures, and a 12% drop on June 6, 2023 following the SEC lawsuit alleging the company operated as an unregistered securities exchange.

The class action, led by Swedish pension fund Sjunde AP-Fonden, covers investors who bought Coinbase shares between April 14, 2021, and June 5, 2023.

The SEC’s own case against Coinbase was dropped in February 2025, after the Trump administration moved to loosen federal oversight of the cryptocurrency sector, marking a major shift in the U.S. regulatory approach to digital assets.

The case is In re Coinbase Global Inc. Securities Litigation, U.S. District Court, District of New Jersey, No. 22-04915.

Block Wins Dismissal of Shareholder Lawsuit Over 2021 Cash App Breach

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Block (XYZ.N), the fintech company led by Jack Dorsey, has defeated a shareholder lawsuit tied to a 2021 Cash App data breach that exposed information from about 8.2 million users.

The Case

  • Shareholders accused Block of:

    • Inflating its stock price by failing to disclose weak data security before the breach.

    • Delaying disclosure until April 2022, nearly four months after the incident.

    • Misleading Afterpay shareholders ahead of its $29 billion acquisition of the BNPL firm in January 2022.

Court’s Ruling

  • U.S. District Judge Margaret Garnett in Manhattan dismissed the case.

  • She ruled there was no evidence Block intended to defraud investors.

  • General statements about data security risks were not guarantees of system safety.

  • Shareholders also failed to prove:

    • A unique link between alleged misstatements and the Afterpay deal.

    • That Block executives had a specific motive or benefit from the alleged omissions.

Context

  • Block has faced regulatory pressure over Cash App:

    • $80M settlement with 48 U.S. state regulators (Jan 2024).

    • $40M settlement with New York (Apr 2024).

  • Despite these issues, Cash App processed $283B in inflows in 2024 and had 57M monthly active users by year-end.

What’s Next

  • The case (In re Block Inc Securities Litigation, No. 22-08636) is now dismissed, though investors could still pursue an appeal.

  • For Block, the ruling removes a major legal overhang as it continues to scale Cash App and integrate Afterpay.

Intel Wins Lawsuit Over Foundry Losses, $32 Billion Market Drop

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Intel has successfully defended itself against a shareholder lawsuit that accused the company of fraudulently hiding issues within its foundry business, which led to significant financial losses and a $32 billion drop in market value in a single day. The lawsuit stemmed from Intel’s failure to immediately disclose a $7 billion operating loss in its foundry business for the fiscal year 2023, which wasn’t revealed until April 2024.

U.S. District Judge Trina Thompson, in a decision made public on Tuesday, dismissed the claims, ruling that shareholders had incorrectly linked the $7 billion loss to Intel’s Foundry Services business. The judge further noted that statements made by former CEO Patrick Gelsinger regarding the company’s “significant traction” and “growing demand” for its foundry services were not misleading, as they referred to specific customers, not the overall revenue, which had been declining.

The lawsuit had accused Intel of inflating its stock price from January 25 to August 1, 2024, during which time the company posted a quarterly loss of $1.61 billion, announced layoffs of more than 15,000 employees, and suspended its dividend to save $10 billion in 2025. As a result, Intel’s stock price dropped by 26% the following day, causing a loss of $32 billion in market capitalization.

The Santa Clara-based company, which has faced growing competition from chipmakers like Nvidia, AMD, Samsung, and TSMC, has struggled to capitalize on the artificial intelligence boom. Intel ousted Gelsinger as CEO in December.

The case, titled In re Intel Corp Securities Litigation, was filed in the U.S. District Court for the Northern District of California.