Blockchain firm sues Coinbase for $350M alleging patent infringement
Crypto exchange Coinbase has found itself in legal hot water after being accused by blockchain-based software firm Veritaseum Capital of infringing on a patent relating to its blockchain technology — and is now seeking $350 million in damages.
According to a lawsuit filed on Thursday by U.S. law firm Brundidge & Stanger in the U.S. District Court in Delaware, Veritaseum alleges that Coinbase infringed on its cryptocurrency payment transfer technology patent, known as the “566 Patent.”
Veritaseum said the patent revolves around “novel devices, systems and methods” which enable parties to “enforce value transfer agreements” with “little or no trust” in each other, alleging Coinbase used this for many of its blockchain infrastructure services:
The law firm also explained that the patent is applicable with proof-of-stake (PoS) and proof-of-work (PoW) blockchains, which could enable the transfer of cryptocurrency payments, trading and staking services on chains supported by those consensus mechanisms.
Furthering my many warnings of the risks of poor due diligence, our suit includes infringement of patent claims that cover PoS & PoW Ethereum, transfer of NFTs & Bitcoin. This was public info since 2015, I've been tweeting publicly for almost a year. It should surprise no one! https://t.co/MjuJSvYBrc
Veritaseum justified the $350 million figure by arguing that Coinbase had “gained substantial profits by virtue of its infringement” and that Veritaseum Capital “sustained damages as a direct and proximate result.”
The attorneys also noted that Veritaseum had previously sent a letter to Coinbase in July warning it of its alleged infringement, adding:
In July, Vertiaseum’s “Coinbase: Forensic Analysis & Deep Dive” report suggested that
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