Coinbase Shares Fall Over 6% Amid SEC Battle

Coinbase shares are under pressure as the U.S. Securities and Exchange Commission turns up the heat on the cryptocurrency industry. COIN shares have sunk 6% so far today to below the $55 threshold. 

Regulators are sticking to a script that most digital assets are securities and therefore it has the jurisdiction to oversee them similar to stocks and bonds. Cryptocurrency exchanges like Coinbase have been thrust into the spotlight considering they support many of the assets that the SEC is targeting. 

Coinbase stock has taken investors on a roller coaster ride lately. While shares are up 50% year-to-date, the stock is still off its 2023 highs of around $85 per share. Investors are grappling with regulatory challenges and the SEC’s crackdown on the industry. 

Coinbase vs. the SEC 

Meanwhile, Coinbase CEO Brian Armstrong has gone on offense against the securities watchdog as it fights for its right to operate in the United States.  Most recently, the Coinbase boss has taken aim at SEC Chairman Gary Gensler, pointing to the regulator’s “lone crusade” against crypto, according to CNBC. 

Armstrong is looking for a regulatory framework by which to operate but believes the SEC is more focused on curtailing the industry than it is regulating it. 

Armstrong has also backpedaled on previous claims that the exchange might move its headquarters abroad due to a lack of regulatory clarity in crypto. However, he still has his sights set on an international expansion and is leaning toward the UAE, which Armstrong says “has been more forward thinking than the U.S.” 

The Coinbase CEO further addressed the legal cases that the SEC has brought against cryptocurrency projects, which he believes will result in greater regulatory clarity that will benefit the industry as a whole. 

Coinbase’s Q1 Results

In recent days, Coinbase reported a Q1 net loss of $79 million, marking five straight quarters of net losses. However, revenues of $773 million were a bright spot, up 22% vs. the previous quarter. Operating expenses fell by over 20%. 

With the cryptocurrency markets stuck in the doldrums, it’s not surprising that Coinbase’s trading volumes are lower, coming in at $145 billion vs. $309 billion in Q1 2022.