Coinbase scored a major but incomplete win Thursday in a long-running lawsuit over whether the crypto exchange illegally sold unregistered digital-asset securities. A Manhattan federal judge dismissed claims tied to most customer trades while leaving the company exposed over a narrower slice of transactions filled from its own inventory.
According to Reuters, U.S. District Judge Paul Engelmayer dismissed claims based on matched transactions but ruled Coinbase was a statutory seller for inventory transactions. Customers sued in 2021 over more than 60 tokens, including XRP and Dogecoin.
Most Coinbase Trades Were Matched Between Users
The distinction turns on how the transactions were completed. Coinbase argued in a court filing that an estimated 99.97% of trading volume came from orders matched between users, with the remaining trades filled from operational inventory in limited circumstances such as platform disruptions or orders below minimum trade sizes.
That defense filing said the matched trades represented hundreds of billions of dollars in volume, while the inventory transactions covered at least $178 million in sales. The judge’s ruling nevertheless treated Coinbase as a statutory seller for those inventory transactions, creating a potential path for customers to pursue claims tied to that activity.
The Legal Fight Has Been Narrowed, Not Erased
The case centers on Section 12(a)(1) of the Securities Act, which can impose liability on a party that directly passes title to a security or successfully solicits its purchase for financial benefit. As outlined by Skadden, Judge Engelmayer previously allowed the statutory-seller question to proceed through focused discovery after rejecting Coinbase’s effort to end the case at the pleadings stage.
The new decision changes the battlefield. Claims tied to the overwhelming majority of matched transactions are out, but the inventory-based claims remain relevant, meaning Coinbase did not receive a blanket ruling that its token sales were beyond the reach of securities law.
Why The Ruling Matters For Crypto Exchanges
The Digital Chamber, an industry trade group that supported Coinbase, warned that an expansive definition of “statutory seller” could stifle innovation, Reuters reported. The case arrives as U.S. regulators and courts continue testing whether crypto platforms should be treated like traditional securities intermediaries.
Coinbase also has a separate regulatory backdrop: The Securities and Exchange Commission ended its enforcement lawsuit against the exchange in February 2025. For now, the Manhattan customer case leaves a more complicated result—Coinbase has shed most of the lawsuit, but the transactions where it supplied tokens itself are still legally alive.
