- The lawsuit says several Coinbase services are infringing a blockchain patent, demanding $ 350 million
- Plaintiff Veritaseum has settled SEC fees for its cryptocurrency token
(Reuters) – Cryptocurrency exchange Coinbase Global Inc is facing a patent lawsuit related to digital trading technology, brought by a crypto firm whose digital token offering led to a settlement with U.S. securities regulators in 2019.
The lawsuit, filed Thursday by Veritaseum Capital LLC in federal court in Delaware, alleges that Coinbase has infringed a patent granted to Veritaseum founder Reggie Middleton by the US Patent and Trademark Office last December.
Veritaseum Capital has accused several Coinbase services, including a blockchain infrastructure for validating transactions, of patent infringement. He asked the court for damages of at least $ 350 million.
Coinbase, one of the world’s largest cryptocurrency trading platforms, did not immediately respond to a request for comment on Friday.
Veritaseum has previously issued the VERI token. In 2019, Middleton and its two Veritaseum entities paid over $ 9.4 million to the US Securities and Exchange Commission, including a $ 1 million fine for Middleton itself, for settling allegations of a “fraudulent plan” to sell a token in 2017 and 2018.
The SEC accused them, among other things, of misleading investors about the demand for tokens and manipulating their price. They agreed to a settlement without denying or admitting basic charges.
Middleton and Veritaseum in early 2019 argued in a federal court in Brooklyn that they had not made any false statements that the tokens were not securities, and the disputed trading was “in fact Mr. Middleton’s effort is testing a new online cryptocurrency exchange.”
Veritaseum says it is “building blockchain-based, peer-to-peer capital markets as software on a global scale.” Thursday’s lawsuit accuses Coinbase features, including website, mobile app, and Coinbase Cloud, Pay and Wallet services, of infringing a patent covering a secure method of processing transactions in digital currencies.
Veritaseum Capital attorney Carl Brundidge of Brundidge Stanger said on Friday that Coinbase was “uncooperative” as he tried to get out of court.
Middleton and Veritaseum separately sued T-Mobile in 2020, claiming security breaches of the telecommunications company resulted in the theft of $ 8.7 million in cryptocurrency by hackers. T-Mobile contested the claims, and the case went to arbitration in August.
The case is Veritaseum Capital LLC v. Coinbase Global Inc, United States District Court for the District of Delaware, No. 1: 22-cv-01253.
From Veritaseum: Carl Brundidge and David Moore of Brundidge & Stanger
For Coinbase: Not available
Source: Reuters Trust Principles.