Crypto Exchange Coinbase to Face Existential Threat as SEC Starts New Crackdown on Crypto Sector
Coinbase may be in a world of trouble as the SEC regulators have recently tightened the circle of regulations around the crypto exchange. A financial analyst has shared that the company can be looking at more trouble from the Securities and Exchange Commission but has shown no signs of slowing down its crackdown on the crypto industry.
It is important to note that Coinbase has received a Wells Notice from SEC recently, which is indicative of the start of the prosecution process in many cases.
However, Coinbase officials have been trying to fight back and have taken several protective measures, such as deciding to take the matter to court. At the same time, Coinbase has started to look at the international markets and launched a new wing that is offering perpetual futures contracts for Bitcoin and Ethereum.
The financial analyst has directed his warning at the investors about particular cryptocurrencies that may be considered securities under the SEC rule.
Financial Analyst Stephen Glagola Predicts More Resistance from Regulators
Stephen Glagola is the main analyst who works at TD Cowen. He has opined that Coinbase might be looking at the potential risk of having to rework its entire consumer-based business model.
He claimed that Coinbase is currently undergoing an existential threat, and he has advised the stock investors who are holding Coinbase stock to sell it before it is too late. It is worth noting that Coinbase is a publically traded company, and it has been listed on NASDAQ since last year under the ticker COIN.
On the other hand, Coinbase stock has performed consistently well since its inception. When the product was first listed on the stock exchange, it managed to reflect monumental gains and became one of the top stock trading entities of the year.
However, since last Thursday, the market has witnessed viewing a massive amount of stock sales for the Coinbase exchange. Nevertheless, COIN has retained revenue of 46% since the start of the current year.
Coinbase exchange has decided to become the new force in the international cryptocurrency exchange markets. Thus far, companies like Binance have been dominating the international sector.
To gather the attention of investors, Coinbase International has decided to offer perpetual futures contracts for Bitcoin and Ethereum. However, Coinbase has applied for registration of its new derivatives trading platform in Bermuda. At present, most cryptocurrency entities are inching closer to regulatory compliance.
Coinbase has shared its new motto of the company, citing that it is planning to expand in the international markets as part of its Global strategy. On the other hand, Coinbase has also issued a response to SEC, citing that Coinbase has been making an attempt to get regulatory clarity, but the matter was delayed by the financial regulator.
At the same time, Coinbase has also filed a prosecution request against the regulatory agency in a court of law to attain regulatory clarity.
Recently, SEC Chief attended the Congressional hearing where he refrained from citing Ethereum as either a commodity or a security despite repeated questioning from the legislators in attendance at the hearing event. It seems that financial regulators are still conducting their research on individual crypto projects.
