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- 1 The SEC charged Coinbase for violating sections 5(a) and (c) of the Securities Act.
- 2 COIN Stock slipped more than 10% after the SEC went after the cryptocurrency exchange.
The Securities and Exchange Commission (SEC) of the United States sued Coinbase over charges of violating Section 5(a) and 5(c) of the securities act.
As per the press release of the SEC, Coinbase has earned billions of dollars since 2019 by facilitating for its users, the buying and selling of crypto assets securities. The SEC notes that the exchange intertwined the traditional services of an exchange, broker, and clearing agency without registering any of those functions with the commission as per the laws.
The news of the lawsuit against Coinbase has stirred the stock market and crypto market. Following the news, Coinbase stock lost more than 9% in its last trading session. One of the most common moves of institutional investors is that when some stock falls rapidly, they purchase a vast number of shares to sell immediately when the price rises in the coming days (if it does).
Earlier, Coinbase attempted to engage the SEC over crypto regulations and enforcement issues in the crypto industry. The crypto firm petitioned the financial watchdog for clarity on crypto rules, but the watchdog did not respond.
After the steep decline of Coinbase stock, Cathie Wood’s Ark Investment acquired 419,324 shares of the crypto exchange. As per Bloomberg, on Tuesday, COIN Stock fell by 21%, but at the market’s closing time, the stock lost 9.05%.
On June 5, COIN Stock opened trading at $63.38. After hitting a high of $64.44, it fell below $56 and closed at $58.71. The pre-market price of COIN Stock shows an upward movement and might open trading at $53.59.
Coinbase Stock Price Movement
COIN Stock slipped 14.13%, 4.51%, and 15.67% on the weekly, monthly, and quarterly charts.
Technical indicators suggest that COIN Stock is giving strong sell signals, but analysts suggest a neutral movement which means neither to sell the holdings nor to purchase more.
The predicted price target of COIN Stock is $69.25, and the market capitalization of Coinbase is $12.109 billion (press time). TradingView shows 72.74% of exchange shares are free float..
The action of the SEC against Coinbase will trouble the exchange and the industry. 85% of the exchange’s revenue is generated from operating in the United States.
According to Nasdaq’s official website, Coinbase shares are held by more than 750 institutional holders some of which include Vanguard Group Inc, Ark Investment, Blackrock Inc, Morgan Stanley, Goldman Sachs, North Trust Corp, among others.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
