Coinbase (COIN) Stock Falls Following Patent Infringement Lawsuits

Coinbase (COIN) Stock Falls Following Patent Infringement Lawsuits. Coinbase is one of the most popular cryptocurrency exchanges globally. It has managed to rise to the rank of the most used platforms in just a few years of existence thanks to its performance.

Nevertheless, Coinbase has been facing several legal troubles for some time. One of the platform's recent legal issues involves blockchain-focused fintech software company Varitaseum Capital LLC. The latter filed, on September 22, a complaint against the Coinbase cryptocurrency platform.

A complaint for violation of the terms of a patent related to blockchain technology

According to the complaint filed last Thursday by the company Veritaserum in the State of Delaware, Coinbase allegedly violated a patent relating to its blockchain technology. The US law firm Brundidge & Stanger, defending the accusing party, alleges in the complaint that the platform infringed its 566 patent relating to cryptocurrency transfer technology .

According to company officials, the 566 patent is a technological breakthrough contributing to the improvement of cryptocurrency payment and transfer technology. It is about integrating new devices, systems, and methods that can allow multiple parties to enforce value transfer agreements with little or no trust in each other.

In detail

In the complaint, attorneys for Veritaserum allege that Coinbase used this technology for many of its blockchain infrastructure services. Indeed, they claim that the new technology has been integrated into the Pay service, Cloud, wallet, website, and Coinbase app.

This complaint seeks not only payment of $350 million in damages, but also that Coinbase stop using its patented technology in its services. To justify its desire to receive $350 million in damages, the company estimated that Coinbase managed to make substantial profits by profiting from its infringement. A breach that caused direct and immediate damage to Veritaseum Capital.

An in-depth study of the complaint reveals that an amicable settlement has already taken place at the initiative of the Veritaserum company. Indeed, company attorneys noted that Veritaseum had already sent a letter to Coinbase in July warning it of its alleged infringement. However, because Coinbase not being cooperative, the company had no choice but to file a formal complaint.

In the same month, a study by Vertiaseum titled “Coinbase: Forensic Analysis & Deep Dive” suggested that there may be other centralized and decentralized digital asset exchanges that use one of Veritaseum's patented intellectual properties without having a license in addition to Coinbase.

The effect of the complaint on the Coinbase platform

Although many believe it to be a mere coincidence, there is no denying that the value of shares in the company Coinbase (COIN) has fallen more than 8% since September 22, even as news of the complaint began to spread.

For most players and analysts, the largest cryptocurrency in the world, Bitcoin (BTC), also saw a bearish movement during this period. A factor that could well have affected the price action of COIN.

Last month, the company's shares did not have a relatively stable value. Indeed, they could trade in a wide range ranging from $59.43 to $84.58 but still remain below all moving averages. Technical analysis of the market shows the stock hovering around a support line at $61.87 and a resistance zone at $71.81-$74.29.

An additional legal problem for Coinbase

As noted above, this instance is not the first time Coinbase has found itself embroiled in a lawsuit. These are also problems that have become recurrent with the majority of cryptocurrency exchange platforms in recent months.

On August 31, several investors came together to file a class action lawsuit against Coinbase. In their complaint, they claim that the company allegedly made misleading misrepresentations about its business, operations, and compliance policies. Additionally, Coinbase has also been accused of harboring executives who engage in the practice of insider trading.

Exchanges are at the heart of the cryptocurrency industry. Nevertheless, they all face justice in one way or another. Especially with the SEC, which has Ripple in its sights, for example.