Coinbase sued for patent infringement over 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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  • The lawsuit claims that several Coinbase services are infringing the blockchain patent, asking for $ 350 million
  • Plaintiff Veritaseum cleared the SEC’s expenses on its cryptocurrency token

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

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

Veritaseum Capital has 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 cryptocurrency trading platforms, did not immediately respond to a request for comment on Friday.

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

The SEC accused them of misleading investors on token demand and manipulating their price, among other things. They accepted the deal without denying or admitting the underlying expenses.

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

Veritaseum’s website claims 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 are suing T-Mobile separately in 2020, claiming that the telecom company’s security failures led to hackers stealing $ 8.7 million in cryptocurrency from them. T-Mobile disputed the claims and the case was sent for 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.

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

For Coinbase: not available

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Blake Great Britain

Thomson Reuters

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

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