Gate News reports that on March 6, a shareholder of a certain CEX, Kevin Meehan, filed a derivative shareholder lawsuit on behalf of the company, accusing CEO Brian Armstrong and other executives of making misleading statements from April 2021 to June 2023, failing to fully disclose customer asset custody risks, securities law risks related to token listings, and anti-money laundering compliance issues. The defendants include co-founder Fred Ehrsam, Chief Legal Officer Paul Grewal, President and COO Emilie Choi, and several board members. The complaint states that the exchange’s user agreement refers to custodial wallet assets as “assets held by the company on behalf of customers,” but does not disclose that if the company goes bankrupt, these assets could be included in bankruptcy assets, potentially making retail users unsecured creditors. Additionally, the company claims that the token listing review process can “ensure that no securities appear on the platform,” but some tokens still face securities risks. The complaint also accuses several executives of selling stock using non-public information around the company’s direct listing in 2021.
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