$COIN Crashes: Guilty Before Trial ? Unfair !
On Wed, 27 Mar 2024 - the Securities and Exchange Commission (SEC) scored a major win in its lawsuit against $Coinbase Global, Inc.(COIN)$.
9 months ago (in June 2023), SEC filed suit against Coinbase, alleging that it facilitated trading of at least 13 crypto tokens that should have been registered as securities.
It also accused that Coinbase was operating illegally as a national securities exchange, broker and clearing agency without registering with the regulator.
SEC also demanded the company be “permanently restrained and enjoined” from continuing to do so.
US District Judge Katherine Polk Failla ruled that SEC’s claim that the cryptocurrency exchange engaged in unregistered sales of securities could be heard by a jury at trial.
Extracts from Judge’s ruling:
The term "crypto" might be new, but the disputed transactions are similar to investments that courts have used to identify securities for almost 80 years.
The judge ruled that the SEC has a good case in saying Coinbase sold unregistered securities through its Staking Program.
In the same decision, the judge threw out a separate part of SEC's lawsuit, that accused Coinbase of acting like an unlicensed middleman (broker) by offering its digital wallet app to customers.
On news of the ruling in Manhattan federal court rejecting Coinbase’s bid to dismiss the SEC’s complaint, it fell -2.5% to $260.14 per share.
Overall, Coinbase fell by -3.79% ending with $256.70 per share, at the end of Wednesday, trading day.
With great power comes great responsibility
Coinbase has evolved and has taken on a bigger role in Wall Street’s cryptocurrency adoption.
In January 2024, the SEC approved in total ten - US Spot bitcoin ETFs.
In return, many of the ETFs have partnered with Coinbase as their custody partner, based on its trustworthiness and expertise in the specific area of cryptocurrency custody.
Since the January launch, these US bitcoin spot funds have seen record inflows.
Collectively, they have brought in around $52 Billion.
In June 2023, SEC Chair Gary Gensler made several spiteful remarks:
Trading platforms like Coinbase “call themselves exchanges” but were “commingling a number of functions.”
“We don’t see the New York Stock Exchange (NYSE) operating a hedge fund.
My viewpoints: (mine & mine only)
Personally, I think it has been a mistake by the Biden administration to appoint Gary Gensler as the chair of SEC. (see below)
You only need to surf the internet to find below the belt, actions undertaken by him.
I cannot wait for the trial to begin and for the defendent lawyer expose the shortcomings of this person.
I also think US market had a knee jerked reaction to the news.
Afterall doesn’t the US 5th amendment state that a man is presumed "innocent until proven guilty"?
Why isn’t this practice extended to Coinbase?
Is it fair for SEC to expect financial institutions to fall in line when there is no clear framework or structure to work within?
Must Read: Click on below titles to access. Give a like & help to repost ok. Thanks.
Do you think US market has over reacted to the news?
Do you think Coinbase will rise above this “approval for trial to begin” incident?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Pls help to "Re-post". Tks! Rating is important (to me).
Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!