Veritaseum Sued Coinbase Over Patent Infringement, Seeks $350 M For Settlement

Coinbase is struggling with another patent infringement lawsuit, among other legal issues. A blockchain-based fintech software company in New York, Varitaseum Capital LLC, sued the crypto exchange for infringing its patent transfer technology for various exchange services.

Reggie Middleton, the founder of Veritaseum, filed the patent infringement case against Coinbase in Delaware federal court on Thursday. It alleged that Coinbase had used its patent, developed for secure digital transactions, in its Pay service, Cloud, wallet, website and app.

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The plaintiff highlighted in the case that the US Patent and Trademark Office granted him the patents in question in 2021. The recently filed complaint says;

Reginald Middleton (“Mr. Middleton”) has invented novel devices, systems and methods that enable parties with little or no trust in each other to enter into and enforce value transfer agreements contingent upon the entry or participation of a third party , at arbitrary distances. , without special technical knowledge of the underlying transfer mechanisms and was granted a patent by the US Patent and Trademark Office (“USPTO”), namely US Patent No. 11,196,566 (the “‘566 Patent”) (see Ex. 1).

The company contacted Coinbase to resolve this issue without having a legal dispute in court. But the crypto exchange was not “cooperative,” said Carl Brundidge, a lawyer at Veritaseum Capital. And now, Middleton and his company are asking the court to award him $350 million in damages, for Coinbase to plead guilty and prevent the platform from using those patents in its services.

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Veritaseum faced charges of running a “fraudulent scheme” by the SEC in 2019

In particular, the plaintiff firm Veritaseum as well was facing charges of running a fraudulent scheme by the Security and Exchange Commission (SEC) in 2019. The authority accused the company of misleading the community about the market value of its VERI token to promote its sale. In addition, the SEC alleged that the platform manipulated the price of the token from 2017 to 2018.

Veritaseum and its founder Middleton initially claimed in federal court in Brooklyn that the company did not make false statements with intent to defraud and that its native tokens were not securities. And he further added that the troubled token trading was “actually an effort by Mr. Middleton to test a new online cryptocurrency exchange.”

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But eventually, the company and its founder agreed to settle the settlement by paying the SEC more than $9.4 million in total. However, they spent an additional 1 million as a penalty for Middleton to settle the fraudulent scheme charges against him.

Veritaseum, according to its website, is a software manufacturing company that develops peer-to-peer, blockchain-based capital markets that allow anyone to participate worldwide. It prevents any third-party counters from working and allows one with an internet connection to interact with the market on a peer-to-peer or one-to-one basis.

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