Coinbase offered for trading crypto assets that the SEC classifies as securities and which the company should have registered as such, according to the lawsuit filed in court in New York on Tuesday. Coinbase operates an illegal US securities trading exchange while also performing certain other financial services without the necessary licenses.
Coinbase boss Brian Armstrong reacted to Twitter with criticism of the SEC. Instead of publishing clear rules, the regulator is pursuing an approach of “regulation through coercion” that “endangers America”. In addition, various US financial regulators themselves do not agree on the legal definition of crypto assets. Coinbase is therefore proud to represent the industry in court to finally get more clarity. The SEC also reviewed Coinbase’s business model in connection with its IPO in 2021 and had no objections at the time.
Coinbase boss Armstrong has been in a clinch with the SEC for some time anyway. The company blog of the US company opened before the lawsuit with a post from March, the headline of which reads: “We asked the SEC for sensible crypto rules for Americans. Instead, we received legal threats.” SEC boss Gary Gensler has made the market for digital currencies, which is often criticized as too laxly regulated, a hobby. At the latest since the spectacular collapse of the industry giant FTX of young US entrepreneur Sam Bankman-Fried – who faces a long prison sentence because of allegations of fraud – the SEC has been under great pressure to tighten the reins.
With the lawsuit against Coinbase, the authority is now further tightening its pace. The day before, the SEC had already filed a lawsuit against the operator of the world’s largest crypto trading platform, Binance. Gensler accused Binance and company founder and boss Changpeng Zhao of deception, conflicts of interest, disclosure failures and calculated evasion of the law. For example, investors were misled about risk controls and trading volumes.
Binance said it takes the SEC’s allegations seriously. However, the company also announced that it would vigorously defend itself. Binance actively cooperated in the investigation. The fact that the authorities have filed a lawsuit is discouraging. “The SEC’s actions undermine America’s role as a global center for financial innovation and leadership,” the statement continued.
DAX – These are the consequences of yesterday’s sales in the DAX!
All chart analysis can be found on our YouTube channel. Inform now!
Shares on the crypto exchange Coinbase temporarily fell by 13.06 percent to $51.04 in the wake of the SEC’s lawsuit on the NASDAQ. At times they even fell by more than 20 percent to their lowest level since mid-January.
Expert Mark Palmer from Berenberg Bank reacted with little surprise on Tuesday, because he had been pointing out the risk of an SEC lawsuit against Coinbase in studies since May. “A significant portion of revenue is at stake because of the continued crackdown on the crypto space by US regulation,” the expert emphasized.
After a strong start in April 2021, Coinbase stock has long had a difficult time with investors. Compared to the reference price of 250 US dollars at the start of the stock exchange, the shares are now worth only a fifth at around 50 dollars.
Shares of business software group MicroStrategy suffered at times after suffering from Binance news on Monday. In the meantime, however, they are clearly up again on the NASDAQ and at times gain 9.89 percent to $303.69. The company guards a huge Bitcoin hoard.
Bitcoin only briefly under pressure after SEC lawsuits
The price of the cryptocurrency Bitcoin only came under pressure for a short time after a double strike by the US Securities and Exchange Commission on large crypto trading companies on Tuesday. After the US Securities and Exchange Commission filed a lawsuit against the largest crypto exchange Binance on Monday, a lawsuit against the large US crypto company Coinbase followed on Tuesday.
Although the prices of Bitcoin and Co. reacted negatively to the news, according to market observers, they held up relatively well given the severity of the allegations. The blockchain trading currency from Binance (BNB) temporarily lost more than 12 percent within 24 hours and thus almost 4 billion in market capitalization – in the evening, however, it was already higher than the day before. At times, Bitcoin fell a good 4 percent on Tuesday afternoon to around $25,500. That was the lowest level since mid-March. Towards evening, however, the losses have already disappeared and Bitcoin is trading at around 26,666 US dollars again.
/gl/jha//sta/tp/AWP/bgf//tih/ajx/men
NEW YORK/FRANKFURT/ZURICH (dpa-AFX)
Image source: Primakov / Shutterstock.com, Burdun Iliya / Shutterstock.com