Coinbase Begins SEC Court Fight, Another Legal Threat Looms.

Here Is Coinbase Latest News : Coinbase Begins SEC Court Fight, But Another Legal Threat Looms.

30 June 2023

Here is Coinbase latest news. Coinbase, a cryptocurrency trading platform, has taken the next stage in a major legal dispute that might last years. However, investors should be mindful of a less well-observed activity that might reach a head in just a few weeks.

Coinbase (COIN) responded in court late Wednesday to claims from the Securities and Exchange Commission that it is operating unlawfully as a securities exchange without the necessary certifications.

As predicted, the trading platform’s attorneys contended in a complaint with the United States District Court for the Southern District of New York that the tokens it allows investors to purchase and sell are not securities, putting the firm beyond the authority of the SEC. The lawyers also claimed that the SEC had not clarified its regulations or provided Coinbase with adequate notice that the agency suspected the business was breaking the law.

The SEC did not reply quickly to a request for comment.

As the SEC and the crypto platform argue over whether crypto tokens constitute securities, the judicial battle might last months or perhaps years. Following the SEC’s lawsuit on June 6, Coinbase Chief Legal Officer Paul Grewal stated that the company would continue to operate as usual.

However, investors should keep an eye on a lesser-known move that might come to a head as soon as the first week of July. On the same day that the SEC sued Coinbase, ten state securities authorities, including those from Alabama, California, and New Jersey, filed a coordinated series of proceedings against the business, saying that its “staking” product is a security that must be registered. Coinbase’s striking feature allows investors to put tokens they possess in return for income, which the business retains.

Some of the state measures compel Coinbase to demonstrate that its product is not a security within 28 days or discontinue providing it, putting the deadline on July 4.

The regulators can extend the deadline, but removing staking would significantly reduce the platform’s income.

“We think it is highly unlikely that COIN will be able to convince the states that their concerns are misplaced,” wrote Berenberg Capital Markets analyst Mark Palmer in a research note on Thursday, noting that staking was nearly 10% of the platform’s net revenue in the first quarter. Berenberg has a Hold rating on the stock.

A request for comment from Coinbase was not returned. Executives have previously stated that the firm does not feel the staking product is a security and that, in any event, the company is attempting to diversify revenue sources to earn profits even while cryptocurrency goes through numerous cycles and regulatory challenges.

According to Coinbase latest news, the business would not be the first to discontinue staking services in the United States. Kraken, a rival, agreed in February to stop staking for US clients and pay the SEC a $30 million punishment. Coinbase officials stated that their company’s product was much different from what Kraken offered.

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