SEC Lawsuit Against Binance Could Be a Preview of Action Against Rival Coinbase, Says Analyst
According to Berenberg analyst Mark Palmer, the recent SEC lawsuit against Binance could be a sign of similar action to come against rival crypto exchange Coinbase. The SEC alleges that Binance, its CEO Changpeng Zhao, and Binance.US offered unregistered securities to the public and violated securities law with its staking service. This led to a significant drop in crypto markets, including a 9.1% decline for Coinbase. Palmer estimates that 37% of Coinbase's net revenue could be at risk if the SEC targets its token trading and staking operations.
Coinbase Shares Drop Over 10% as SEC Files Suit Against Binance for Alleged Securities Law Violations
Coinbase (COIN) shares dropped by 10.3% following news that the Securities and Exchange Commission (SEC) had filed a lawsuit against Binance for allegedly violating federal securities law. The stock initially fell by over 5% upon the release of the filing and continued to decline. Bitcoin (BTC) also fell by more than 5% to below $26,000, while MicroStrategy (MSTR) shares, which hold a significant amount of bitcoin on its balance sheet, fell by almost 9%. The SEC is accusing Binance of offering unregistered securities and staking services to the public, among other allegations, as U.S. lawmakers increase their enforcement actions against crypto companies. In March, Coinbase received a warning from the SEC that it may face enforcement action related to its listing of potential unregistered securities. The exchange has since focused on expanding its presence in Canada, which it believes has clearer rules for crypto firms than the U.S.
Glassnode: Over the past three years, Binance's Bitcoin holdings have increased by 421,000 coins, while Coinbase's holdings have decreased by 558,000 coins
According to Glassnode's monitoring on June 5th, When evaluating the total amount of Bitcoin held by the top 3 exchanges three years ago, it was found that the total amount of Bitcoin held by Binance and Bitfinex increased by 421,000 BTC and 250,000 BTC respectively, while Coinbase decreased by 558,000 BTC.
Coinbase to Launch Bitcoin and Ethereum Futures Contracts for Institutional Investors on June 5
Coinbase, the largest cryptocurrency exchange in the US, has announced the launch of Bitcoin and Ethereum futures contracts on its CFTC-regulated derivatives exchange on June 5. The products will be available for institutional investors and contracts will be sized at 1 Bitcoin and 10 Ethereum. The decision to launch these products was made in response to feedback from the introduction of nano Bitcoin and Ether contracts.
Bitcoin Price Drops 2% Following Hong Kong's Crypto Regulations, Coinbase Users Move $1 Billion Off Platform
Bitcoin's value dropped by 2% after Hong Kong's new crypto regulations were introduced on June 1, adding to the previous day's 10% decline. The crypto market has been impacted by macro, technical, and regulatory challenges, resulting in a widespread sell-off. After a court ruling revealed that the US Internal Revenue Service can access user trading data, whales and investors have transferred over $1 billion in Bitcoin from Coinbase. Bitcoin's price could fall below $25k due to negative funding rates, while the US Federal Reserve is planning to pause in June and raise rates later amid a US economic slowdown. Coinbase, a well-known cryptocurrency exchange, has been instructed by the IRS to provide information on users who have conducted transactions worth $20,000 or more in a year, as part of the IRS's efforts to combat cryptocurrency-related tax evasion. The news has caused a drop in the price of Bitcoin.
Coinbase CEO Warns of China's Digital Payment Industry Challenging US Crypto Industry
Coinbase CEO Brian Armstrong has warned that the US crypto industry faces a strong challenge from China's digital payment industry. Armstrong noted that China's Alipay and Tencent offer integrated payment systems and are rapidly scaling worldwide, with its social credit system baked in.
Coinbase CEO warns of China's digital payment industry as a strong challenge to US crypto industry
According to Coinbase CEO Brian Armstrong's op-ed on MarketWatch, China's digital payments industry poses a strong challenge to the US crypto industry. Armstrong highlighted the integrated payment systems offered by Chinese tech giants Alipay and Tencent, which are being promoted worldwide with the social credit system baked in. He also noted that China's digital yuan is intended to directly challenge the US dollar. Armstrong urged regulators to create rules that will produce a strong and competitive US crypto industry and called on Congress to pass comprehensive legislation that safeguards consumers and fosters innovation.
Judge Upholds IRS Authority Over Coinbase User Data
The judiciary has ruled in favor of the Internal Revenue Service (IRS) in a case involving the procurement of personal data from cryptocurrency exchange Coinbase. The decision highlights the broad powers of the IRS in enforcing tax compliance, and the limited privacy rights of crypto users. The case involved a decade-long legal battle between the IRS and a Coinbase user, who argued that his privacy rights were violated. However, the judge dismissed his objections and affirmed the IRS's authority to obtain personal data through a summons. Coinbase also reports certain cryptocurrency transactions to the IRS for tax purposes.
Analysts Predict Coinbase Stock Could Reach $70
Coinbase Global has been upgraded to "overweight" by Atlantic Equities, with analyst Simon Clinch providing the reasoning behind the decision. Despite an 80% increase in stock value this year, Clinch's $70 price target suggests a further 20% potential upside. The analyst believes that Coinbase has successfully implemented cost-cutting measures and built resilience into its business model, with recent financial results exceeding expectations. However, potential investors should be aware of the risks associated with regulation and recession, as well as the fact that Coinbase received a "Wells Notice" from the SEC in March.
Berenberg analysts prefer MicroStrategy over Coinbase for exposure to cryptocurrencies
Berenberg analysts have differing opinions on MicroStrategy Inc and Coinbase Global Inc. They believe that MicroStrategy is a better choice for exposure to cryptocurrencies due to its unique business model and potential for growth, with a projected increase to $340 a share. However, they only have a "hold" rating for Coinbase stock due to ongoing regulatory scrutiny, with a price objective of $55 a share. MicroStrategy is considered to be insulated from such risks as Bitcoin has already been classified as a commodity and not a security, while the correlation between MSTR and COIN is currently at about 0.96.
