Top US crypto exchange Coinbase is facing a lawsuit alleging that the firm has been infringing a patent for a value transfer technology.
According to a filing in a Delaware court, Veritaseum Capital is seeking $350 million in damages from Coinbase under the claim that the exchange is using its patent to facilitate several of its services, including Coinbase Cloud, Coinbase Pay and Coinbase Wallet.
The filing states that Coinbase should have been aware of the existence of the patent at least before July 3rd of this year when the plaintiff notified the exchange.
Veritaseum Capital, a firm associated with blockchain technology firm Veritaseum, is led by crypto entrepreneur Reggie Middleton, who co-owns the patent with colleague Matthew Bogosian.
The patent claims ownership of:
“Devices, systems, and methods enabling parties with little trust or no trust in each other to enter into and enforce value transfer agreements conditioned on input from or participation of a third party, over arbitrary distances, without special technical knowledge of the underlying transfer mechanism(s), optionally affording participation of third-party mediators, substitution of transferors and transferees, term substitution, revision, or reformation, etc.”
The filing states that the plaintiff’s allegations apply to Coinbase services utilizing both proof-of-work and proof-of-stake blockchains, and that a “substantial” amount of Coinbase’s revenue comes from services that infringe the patent.
“A substantial portion of the Defendant’s revenues are derived from transaction fees generated from its customer’s use of Defendant’s blockchain infrastructure…
Defendant makes, uses, sells and/or supports infringing products and services on the Bitcoin, Bitcoin Cash, Litecoin, Ethereum and Solana platforms as well as NFTs for its products and offerings that run on top of and facilitate said platforms.”
Coinbase has not made a public statement on the lawsuit at time of writing.
This article was originally published on dailyhodl.com