Coinbase Global has been hit with a patent infringement lawsuit by Veritaseum Capital LCC.
The plaintiff alleges that the company has infringed a patent that was awarded to Reggie Middleton, the founder of Veritaseum, triggering legal proceedings.
Veritaseum’s version is that some of the company’s blockchain infrastructure is in fact based on Middleton’s patent and the company now seeks as much as $350m in damages.
The patent technology in question serves as low-trust peer-to-peer value transfers. Now, the company alleges that Coinbase’s services, including wallet, delegate, validator software, pay, and the commerce API all infringe on the patent.
The infringement extends to the Coinbase Cloud too, which creates a large number of possible infringements that the company is struggling with.
Middleton and Veritaseum were previously involved with the US Securities and Exchange Commission (SEC) back in 2019.
At the time, SEC fined the company over what was described as the fraudulent sale of VERI tokens between 2017 and 2018, Veritaseum’s proprietary cryptocurrency.
SEC accused Middleton and the Veritaseum entities of misleading investors at the time but reached a settlement amounting to $9m.
SEC has been actively going after issuers of coins, including Ripple Labs, alleging fraud. While Veritaseum has acknowledged fault, Ripple Labs has been fighting back for years now.
Similarly, SEC is also going after Coinbase, which the regulator alleges has been listing securities. The company responded at the time that it does not list securities, “end of story”.
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