{"id":19563,"date":"2023-06-07T15:40:44","date_gmt":"2023-06-07T19:40:44","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/bank-of-america-coinbase-faces-ongoing-regulatory-headwinds-amid-sec-lawsuit\/"},"modified":"2023-06-07T15:40:45","modified_gmt":"2023-06-07T19:40:45","slug":"bank-of-america-coinbase-faces-ongoing-regulatory-headwinds-amid-sec-lawsuit","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=19563","title":{"rendered":"Bank of America: Coinbase faces ongoing regulatory headwinds amid SEC lawsuit"},"content":{"rendered":"
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\u00a9 Reuters <\/span>
\n<\/i>\n<\/div>\n

Investing.com — Coinbase Global <\/span><\/span> Inc (NASDAQ:)\u00a0faces mounting regulatory challenges after the U.S. Securities and Exchange Commission sued the crypto exchange as part of a widening crackdown on trading in digital assets, analysts at Bank of America have warned.<\/p>\n

The SEC claimed that the San Francisco-based company failed to comply with rules requiring it to register as a broker, national securities exchange or clearing agency.<\/p>\n

It was the second time in two days that the financial regulator unveiled charges against a crypto exchange. On Monday, the SEC also filed similar charges against Coinbase rival Binance.<\/p>\n

“[W]e think these latest developments illustrate ongoing regulatory headwinds, which not only could threaten part of [Coinbase]\u2019s business model, but also represent a big management distraction,” analysts at Bank of America said in a note to clients that reiterated its “underperform” rating of the stock.<\/p>\n

The analysts added that the SEC’s lawsuit against Binance — the world’s largest cryptocurrency exchange — also highlights the regulator’s focus on digital token platforms that allow trading of non- or crypto assets it considers to be unregistered securities.<\/p>\n

The analysts added that SEC seems to be targeting businesses that created and provided so-called staking services, in which a customer agrees for their cryptocurrencies to be “locked up” for a period of time in order to receive returns on them. Authorities have questioned whether that practice is essentially akin to an investment contract and should follow certain regulatory parameters.<\/p>\n

The Bank of America analysts flagged that about 23% of Coinbase’s net revenues came from non-Bitcoin or Ethereum related transactions in the first quarter, while staking rewards made up around 10% of that figure.<\/p>\n

“We also note that crypto trading volumes [year-to-date] have been noticeably weaker than in 2022, despite a rebound in crypto prices; in our view, the regulatory overhang will likely only exacerbate this issue and likely result in downside to current [Coinbase] estimates,” the Bank of America analysts said.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters Investing.com — Coinbase Global Inc (NASDAQ:)\u00a0faces mounting regulatory challenges after the U.S. Securities and Exchange Commission sued the crypto exchange as part of a widening crackdown on trading in digital assets, analysts at Bank of America have warned. The SEC claimed that the San Francisco-based company failed to comply with rules requiring it […]<\/p>\n","protected":false},"author":1,"featured_media":19564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-19563","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nBank of America: Coinbase faces ongoing regulatory headwinds amid SEC lawsuit | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters Investing.com -- Coinbase Global Inc (NASDAQ:)\u00a0faces mounting regulatory challenges after the U.S. Securities and Exchange Commission sued the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=19563\" 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