Key Takeaways
- The crypto exchange claims the domain was acquired and operated in bad faith, leveraging the company’s established brand to generate profit
- After being asked to stop using the domain for affiliate promotion, Coinbase alleges Honscha redirected the domain to a separate mobile platform for trading collectible coins.
Leading crypto exchange, Coinbase has initiated a lawsuit in a U.S. federal court against a German national, accusing him of cybersquatting and violating contractual terms tied to its affiliate program. The legal action targets Tobias Honscha, a resident of Isernhagen, Germany, over his ownership and use of the domain coinbase.de.
The crypto exchange claims the domain was acquired and operated in bad faith, leveraging the company’s established brand to generate profit and potentially create confusion among users. In its filing, Coinbase stated that Honscha once used the domain to host an affiliate link directing users to Coinbase, which generated commissions for him. The company’s affiliate terms, however, prohibit the use of its trademarked name in domain registrations or branding, a rule Coinbase asserts Honscha violated.
After being asked to stop using the domain for affiliate promotion, Coinbase alleges Honscha redirected the domain to a separate mobile platform for trading collectible coins. In addition to redirections, the domain was reportedly used to operate an email service under the address @coinbase.de, which the company says enabled Honscha to potentially intercept communication meant for the legitimate Coinbase entity.
The lawsuit references Coinbase’s concern that the email domain could trick individuals into sharing personal information, including login credentials and sensitive identity documents, under the mistaken belief they were communicating with the crypto platform.
The company is now asking the court for remedies, including the transfer of the coinbase.de domain to its control, an injunction blocking Honscha from any future use of the domain, and financial damages linked to the alleged misuse.
Further complicating the dispute, Coinbase accuses Honscha of leveraging the domain to pressure the company into purchasing it. The filing outlines communications in which Honscha allegedly raised the risk of phishing attacks and unsolicited transmission of sensitive user data as potential consequences if the company declined to acquire the domain.
Cybersquatting is referred to the practice of registering domains resembling established brands usually with ill-intent, and is frequently linked to fraudulent schemes or ransom-based transactions. In its suit, Coinbase described Honscha’s actions as a deliberate attempt to trade on its decade-long reputation and global recognition.