The United States Securities and Exchange Commission announced it was suing Coinbase. The exchange’s shares immediately sank by more than 15% in pre-trading.
The news dropped less than 24 hours after the SEC also announced it was suing Binance, alleging the world’s largest crypto trading platform and affiliated companies misled customers and misdirected funds to a separate investment fund owned by the company’s CEO, Changpeng ‘CZ’ Zhao. After the news, Coinbase’s shares were down as much as 12% on Monday. The U.S.-based company trades on the Nasdaq.
Following Monday’s Binance announcement, Berenberg Capital Markets’ analyst Mark Palmer reiterated he was advising investors to proceed carefully when it comes to Coinbase shares, in part, to the risk of the SEC potentially targeting the exchange.
“Our cautious stance toward Coinbase … is largely based on our belief that it is likely that the SEC will bring an enforcement action against the company soon.”
This isn’t Coinbase’s first time locking horns with the SEC. Last year the exchange ran by CEO Brian Armstrong petitioned the SEC to create new rules tailored to digital assets. In April, already under a publicly-acknowledged investigation by the agency, Coinbase took a gamble and filed a lawsuit against the SEC, hoping to force the regulator to respond to its petition.
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Source: https://www.theblock.co/post/233274/coinbase-stock-sec-lawsuit?utm_source=rss&utm_medium=rss