Coinbase is still enjoying a relatively healthy market sentiment as its stock price and target seem unperturbed by the SEC’s lawsuit.
The stock price of Coinbase (NASDAQ: COIN) rose roughly 6% last week, along with the average price target expected by analysts. The major crypto exchange’s stock climbed 5.93% over the period, closing at $55.59.
According to data from MarketWatch, COIN has seen more than 57% in year-to-date (YTD) gains, despite its 26.86% drop over the last three months. COIN has also shed 2.10% of its weight in the past month. Regardless, the stock is still up 8.53% over the past year.
In addition, data compiled by The Block Research has analysts’ average at $69.70 as of Sunday. This figure rose from $69.17 after a broker took its “Sell” rating off COIN.
In an official press release published last week, Coinbase announced it repurchased $64.5 million worth of Convertible Senior Notes (0.50% of the Notes) at approximately 29% to par value. According to the exchange, the repurchase should close around on or around June, depending on certain closing conditions.
Coinbase Stock and Price Target Rises Despite Regulatory Problems
Coinbase stock and price target is still relatively healthy even as it battles accusations and an indictment from the United States Securities and Exchange Commission (SEC). Early in June, the SEC hit Coinbase with a lawsuit accusing the major exchange of conducting business as an unregistered national securities exchange and broker since at least 2019.
According to the SEC’s indictment, Coinbase provided services as a broker, clearing agency, and exchange, without registering any of the services as required. In addition, the SEC faulted the exchange’s staking-as-a-service program.
The indictment notes that Coinbase “has been engaging in an unregistered security offering through its staking-as-a-service program” since 2019. The Commission said it is unlawful to offer these services without adequate registration. In the indictment, SEC Chair Gary Gensler said Coinbase robbed investors of necessary protections, such as proper disclosure, and protection against conflicts of interest. In addition, the SEC named other protective measures, including fraud and manipulation prevention rulebooks, as well as routine SEC inspections.
According to SEC Division of Enforcement Director Gurbir S. Grewal, “while Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled. Today’s action seeks to hold Coinbase accountable for its choices”.
The Coinbase lawsuit came shortly after the SEC also sued Binance. The Commission accused Binance of misappropriating customer funds through a separate entity. In addition, the SEC said Binance did not adequately restrict US customers from trading outside Binance US.
SEC Had Issued a Wells Notice
In March, the SEC issued a Wells Notice, informing the exchange of potential charges. According to the Commission, Coinbase had breached US securities law. However, Coinbase was largely unbothered by the threat. In an official statement, the company’s chief legal office Paul Grewal said Coinbase has been asking for clarity from the Commission to no avail. Grewal said the exchange will “welcome a legal process” to provide the much-needed clarity.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
