Coinbase Sued for Patent Infringement on Crypto Transfer Technology

A representation of the cryptocurrency is seen in front of the Coinbase logo in this illustration taken on March 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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  • Lawsuit Says Several Coinbase Services Infringe Blockchain Patent, Seeks $350M
  • Plaintiff Veritaseum Settled SEC Charges Over Its Cryptocurrency Token

(Reuters) – Cryptocurrency exchange Coinbase Global Inc is facing a patent lawsuit related to its digital trading technology, filed by a cryptocurrency company whose digital token offering led to a settlement with U.S. securities regulators in 2019.

The lawsuit, filed Thursday by Veritaseum Capital LLC in Delaware federal court, claims that Coinbase infringed a patent granted to Veritaseum founder Reggie Middleton by the US Patent and Trademark Office last December.

Veritaseum Capital accused several Coinbase services, including its blockchain infrastructure for validating transactions, of infringing the patent. He asked the court for at least $350 million in damages.

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Coinbase, one of the world’s largest platforms for cryptocurrency trading, did not immediately respond to a request for comment on Friday.

Veritaseum previously issued the VERI token. In 2019, Middleton and two of his Veritaseum entities paid the US Securities and Exchange Commission more than $9.4 million, including a $1 million fine against Middleton himself, to settle charges of a ” fraudulent scheme” to sell the token in 2017 and 2018.

The SEC accused them of misleading investors about the demand for the tokens and manipulating their price, among other things. They agreed to the settlement without denying or admitting the underlying charges.

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Middleton and Veritaseum argued in federal court in Brooklyn in early 2019 that they did not make any fraudulent claims, that the tokens were not securities, and that the trade in question was “in reality an effort by Mr. Middleton to test a new cryptocurrency exchange.” online”. .”

Veritaseum’s website says that it “builds blockchain-based peer-to-peer capital markets as software on a global scale.” Thursday’s lawsuit accuses Coinbase’s features, including its website, mobile app and Coinbase Cloud, Pay and Wallet services, of infringing on a patent covering a secure method for processing digital currency transactions.

Veritaseum Capital attorney Carl Brundidge of Brundidge Stanger said on Friday that Coinbase was “not cooperative” when they tried to settle out of court.

Middleton and Veritaseum separately sued T-Mobile in 2020, alleging that the telecommunications company’s security flaws led hackers to steal $8.7 million in crypto from them. T-Mobile contested the claims, and the case was sent to arbitration in August.

The case is Veritaseum Capital LLC v. Coinbase Global Inc, US District Court for the District of Delaware, No. 1:22-cv-01253.

For Veritaseum: Carl Brundidge and David Moore of Brundidge & Stanger

For Coinbase: not available

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blake brittany

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights, and trade secrets. Contact him at [email protected]

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