Moody downgrades Coinbase (COIN) rating to negative

Because of the SEC’s lawsuit, Moody degraded the rating for the Coinbase exchange. 

Coinbase is a US-based crypto firm. This firm provides almost every kind of crypto service under full regulations. Some of the US government agencies use blockchain tools, which were developed by the Coinbase exchange’s blockchain team. On 6 June 2023, the United States Securities Exchange Commission (SEC) sued the Coinbase exchange over alleged unregistered crypto securities offerings, crypto staking services, & also running the national Securities exchange without approval.

Because of the SEC’s suit, Coinbase’s (COIN) share price plunged by 15% within a couple of hours on the same day. The current trade price of COIN share is $55.42 & this trade price is 12.5% down over the last 5 days of trade price. 

On 9 June 2023, Moody, a popular credit ratings agency, downgraded Coinbase’s rating from neutral to negative, which means investment in Coinbase shares may not be a good option for investors.

The credit rating agency clearly explained about its action and confirmed that its experts doesn’t think that it is a better situation for the Coinbase exchange, as the exchange is facing charges of unregistered securities offerings. 

According to Moody, this will result in a very bad impact on the Coinbase exchange’s business because the majority of the Coinbase customers will try to step back from using the Coinbase platform and in that situation, Coinbase will not only see funds outflow but also trade volume will plunge, which means net revenue for Coinbase will plunge. 

“The change in outlook to negative from stable reflects the uncertain magnitude of impact the SEC’s charges will have on Coinbase’s business model and cash flows.”

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