A major shareholder of Coinbase, Wenduo Guo, has filed a lawsuit against the popular cryptocurrency exchange and its top executives for allegedly violating securities laws. The lawsuit, which was filed in a federal court in San Francisco, accuses Coinbase of misleading investors and engaging in illegal activities.

According to the lawsuit, Coinbase and its executives, including CEO Brian Armstrong and President Emilie Choi, made false and misleading statements about the company’s financial performance and compliance with securities laws. Guo claims that these statements were made to artificially inflate the company’s stock price and deceive investors.

The lawsuit also alleges that Coinbase failed to disclose important information to investors, such as the fact that it was under investigation by the Securities and Exchange Commission (SEC) for potential violations of securities laws. This information was only revealed after Coinbase went public through a direct listing on the Nasdaq in April 2021.

Guo, who holds a significant stake in Coinbase, is seeking damages for himself and other investors who purchased Coinbase stock between December 2020 and April 2021. The lawsuit highlights the growing scrutiny and legal challenges faced by cryptocurrency companies as they become more mainstream and attract more investors.

Coinbase, which is one of the largest cryptocurrency exchanges in the world, has been at the center of controversy in recent months. In addition to the SEC investigation, the company has faced criticism for its high fees and technical issues that have caused disruptions for users.

This lawsuit is just the latest in a series of legal challenges for Coinbase and other cryptocurrency companies. As the industry continues to grow and evolve, it is likely that we will see more legal battles and regulatory scrutiny in the future. Investors should be cautious and do their own research before investing in any cryptocurrency company to avoid potential risks and losses.