The Rise of Coinbase: Redemption from SEC Indictment
In recent news, Coinbase, one of the leading American crypto exchanges, faced significant legal scrutiny from the Securities and Exchange Commission (SEC). However, the cloud of uncertainty surrounding the exchange seems to be lifting, resulting in a substantial increase in the value of Coinbase shares. This article explores the events surrounding Coinbase’s legal battle with the SEC and its subsequent redemption in the crypto market.
Allegations of Securities Law Violations
The US financial regulator accused Coinbase, along with Binance, of violating federal securities laws. The SEC identified several altcoins and the staking service offered by Coinbase as securities. However, in the United States, securities can only be issued with the appropriate licenses. This designation of altcoins as securities created fear in the crypto community and led to a sharp decline in the value of bitcoin and affected other altcoins, particularly the ones labeled as securities.
Reversal of Sentiment in the Crypto Market
Despite the initial setback, the sentiment in the crypto market took a positive turn, largely due to institutional support. Coinbase, in particular, regained a positive light amidst the flurry of Exchange Traded Fund (ETF) applications filed with the SEC in recent weeks. Notably, BlackRock chose the Nasdaq as its listing exchange, while the Chicago Board Options Exchange (CBOE) partnered with industry giants such as Fidelity, Invesco, WisdomTree, VanEck, and Ark Invest in an effort to launch a bitcoin ETF in the US market.
Insufficient Filings and the Naming of Coinbase
On Friday, the SEC informed both Nasdaq and CBOE that their ETF filings lacked specificity, particularly regarding the “surveillance-sharing agreement” aimed at preventing fraud and manipulation. The applications did not specify the partner for this agreement. However, CBOE swiftly named Coinbase as its partner in all revised applications.
Skyrocketing COIN Stock
The announcement of Coinbase’s involvement in the revised ETF filings had an immediate impact on its stock price. Shares of Coinbase (COIN) experienced an astounding surge, increasing by more than 10 percent in a single day. Furthermore, prominent bitcoin analyst Will Clemente shared on Twitter that Coinbase’s stock had risen by a staggering 70 percent in less than a month.
Despite facing legal challenges and allegations of securities law violations, Coinbase has managed to regain its reputation and investor confidence. The naming of Coinbase as a partner in the revised ETF filings has contributed significantly to the surge in its stock price. As the crypto market continues to evolve, Coinbase’s redemption from the SEC indictment highlights its resilience and ability to adapt to regulatory changes.