Leading crypto exchange Coinbase Global is facing a patent lawsuit related to its digital trading technology. The lawsuit, filed last week at the Delaware Federal Court, was initiated by Veritaseum Capital LLC, a crypto company.
According to the claims by Veritaseum Capital LLC, Coinbase Global Inc is said to have infringed a patent awarded to the company’s founder, Reggie Middleton, by the U.S. Patent and Trademark Office, in December 2021.
Veritaseum is a company dedicated to building “blockchain-based, peer-to-peer capital markets as software on a global scale.” The platform utilizes blockchain tech, distributed computing, and smart contracts to empower industries and other bodies affected by insufficiencies in the finance, value, and investment sectors.
The Patent, named Patent 566, is essential for crypto payment and technology. According to a tweet subsequently retweeted by VC, it covers a secure method for processing digital-currency transactions.
VC alleged that Coinbase infringed its Patent through its payment and validator services. Coinbase’s Pay, Cloud service, wallet, website, Commerce APIs, Query and Transact Software, Participate, Delegate, and Validator software utilize the Patent.
The crypto company offered to have the issue settled out of court for $350 million in damages, but Coinbase remained unresponsive. All efforts to get comments via news sources from the crypto exchange have proved abortive.
VC claims it had sent a message to Coinbase in July, warning it of the alleged infringement. Attorneys claim that;
“Defendant had prior knowledge, should have known, or at least been willfully blind of the ‘566 Patent. Defendant has been on notice of the ‘566 Patent at least as early as July 3, 2022, if not earlier from other sources or parties.”
How Will The Lawsuit Affect Coinbase Global Inc
The Patent in question provides utility for significant operations in Coinbase. If the suit is awarded in favor of the plaintiff, VC, it could cause irreparable devastation to Coinbase. Veritaseum Capital has asked for a trial by jury to settle the matter.
On a broader note, it has been brought to light that other platforms in the DeFi industry have built their underlying operations on the technology developed by Veritaseum Capital.
Veritaseum believes that other centralized and decentralized crypto exchanges have unlawfully used the Patent to expedite crypto purchase, payment, trading, and staking features.
Many speculate that the result of the lawsuit will create a ripple effect and set a new precedent, protecting the ideas and innovations of companies with good intentions. It will also redefine the foundation of proper business practices.
Well Fargo Advises Shareholders to Sell As Coinbase Stocks Slump by 10%
The financial services company has expressed its desire to sell COIN shares while advising other holders that keeping Coinbase shares might be risky.
While the bear market has had a general effect on the crypto industry, Well Fargo issued a warning stating that the crypto exchange might fare even worse in the face of the present market conditions.
The ongoing lawsuit with Veritaseum Capital LLC and other charges brought on Coinbase Global has not helped matters either. SEC investigations, damages compensation, and insider information have obtained troubles from watchdogs and regulators.
Caving under stiff competition and a long drop from last year’s revenue mark has forced the crypto exchange to lay off hundreds of employees over the past few months to stay afloat.