Berenberg research says Coinbase may receive SEC enforcement action soon
New research from Berenberg confirmed that there are huge chance that Coinbase exchange may receive a lawsuit/charges action by the US securities regulatory body.
Coinbase is a US-based Nasdaq-listed public trading crypto firm. This crypto exchange provides services for retail & Institutional customers. In Q1 2023, Coinbase reported that the firm generated $736 million. In the last couple of weeks, Coinbase legally imposed significant pressure on the United States Securities and Exchange Commission (SEC) body, to get clarity on the SEC’s crypto sector regulatory approach.
Recently Berenberg, a multinational full-service investment bank based in Hamburg, published its research on the unclear crypto regulatory environment in the US jurisdiction and potential enforcement action against the Coinbase exchange by the US SEC body.
The research noted that Coinbase generated $736 million in the first quarter of this year and 37% of this revenue was a part of transaction revenue (crypto trade & crypto transaction fees & service charges).
Berenberg analyst Mark Palmer noted that the rest of the revenue that Coinbase generated probably came from the staking & interest (i.e. crypto staking & USDC stablecoin lending) services.
According to the analyst, the SEC body may target these coinbase’s crypto offerings and soon may initiate charges against this publicly traded firm.
Research also noted that Coinbase may not go outside the US market directly because its exposure to the US market is very big and it can be understood by the fact that the last 12 months of Coinbase’s 86% revenue came from only the US.
SEC vs crypto exchanges
The US SEC Agency already sent a Wells notice to the Coinbase exchange in March of this year, so there are possibilities that Coinbase may surely receive an enforcement action.
Earlier this, Kraken crypto exchange & Bittrex crypto exchange received Wells notice as well as charges. Kraken Exchange settled the case with a $30 million fine & also terminated crypto staking services for US customers. On the other hand, Bittrex filed for bankruptcy under Chapter 11 & planned to liquidate its assets & leave the US market forever.
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