The exchange accuses a German citizen of cybersquatting and trademark infringement.
Coinbase has filed a lawsuit in a federal court in California against Tobias Honscha, a resident of Isernhagen, Germany. The accusation is cybersquatting—namely, the unauthorized registration of a domain name similar to a well-known trademark—through the improper use of the domain coinbase.de, which, according to the American platform, is being used to redirect users to unrelated services and to generate illicit profits.
The lawsuit, filed on July 24, claims that Honscha is using the domain for commercial purposes unrelated to the exchange, including redirecting visitors to an app for trading physical coins and generating commissions as a Coinbase affiliate.
According to legal documents, Coinbase discovered that Honscha had previously used the domain to host his affiliate link to the exchange, earning rewards for every new user who signed up through the link.
The company states that this practice violated the terms of the affiliate agreement, which explicitly prohibits the use of domains that could “masquerade as Coinbase” or include the words “Coinbase” or “Coin Base” in the domain name.
“Honscha violated the terms of the Affiliate Agreement by using the coinbase.de domain, which fully incorporates the COINBASE trademark and gives the impression that Honscha is one in the same with Coinbase,” the complaint states.
The exchange accused Honscha of attempting to “profit from the domain by threatening potential fraud or cybercrimes unless Coinbase pays an inflated price” to acquire it.
In conversations with Honscha, he allegedly referred to “the risks of a phishing attack via the Coinbase email account” and the possible “unsolicited submission of identity documents, passwords, and one-time 2FA codes” if Coinbase did not purchase the domain.
“This is a clear attempt to hold Coinbase hostage by threatening to offload it to a buyer who would weaponize it even more,” the company stated.
After Coinbase demanded that Honscha stop using the domain for the affiliate link, the site was instead used to redirect visitors to a mobile app for trading physical coins.
The company also accused Honscha of “operating an email service through the @coinbase.de account,” which could allow him to communicate with and collect sensitive information from “individuals who might mistakenly believe they are interacting with Coinbase.”
Currently, the domain redirects to a forum for the discussion of physical coins, where Honscha is listed as the “responsible person” for the site.
Coinbase’s legal demands
Coinbase is asking the court to award damages and any profits resulting from Honscha’s alleged misuse of the domain, to prohibit him from continuing to use it, and to potentially transfer the domain to the exchange.
The company is also seeking compensation for the alleged breach of the affiliate agreement, including any commissions Honscha may have received through the use of the domain.
