Coinbase Global Inc. has formally requested the U.S. Court of Appeals for the Third Circuit to review a recent district court decision allowing a securities class action to proceed, citing conflicting rulings from other federal circuits on the issue of Coinbase traceability.
In a motion filed Friday, Coinbase asked U.S. District Judge Brian R. Martinotti to certify his September 2024 ruling for interlocutory appeal. The decision in question permits a class of investors to move forward with claims based on a statistical inference that they likely purchased registered Coinbase shares following its direct listing. Coinbase argues this method circumvents the traceability requirement embedded in the Securities Act of 1933.
“The ruling creates a split with both the Fifth and Ninth Circuits, which have rejected the statistical inference theory in similar direct listing contexts,” the company stated in its filing.
Coinbase contends that the court’s approach undermines the legal standard that plaintiffs must be able to directly trace their shares to a registered offering. The motion identifies two key questions needing immediate review:
