{"id":29284,"date":"2023-06-29T16:43:14","date_gmt":"2023-06-29T20:43:14","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/coinbase-begins-sec-court-fight-but-another-legal-threat-looms\/"},"modified":"2023-06-29T16:43:15","modified_gmt":"2023-06-29T20:43:15","slug":"coinbase-begins-sec-court-fight-but-another-legal-threat-looms","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=29284","title":{"rendered":"Coinbase Begins SEC Court Fight, But Another Legal Threat Looms"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000682414\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>Crypto trading platform<br \/>\n        Coinbase<br \/>\n       just took the next step in a crucial court battle that may take years to play out. But investors should be wary of a less closely watched action that could come to a head in mere weeks.<\/p>\n<p>Late Wednesday, Coinbase (ticker: COIN) filed a response in court to allegations from the Securities and Exchange Commission that it is operating illegally as a securities exchange without making the proper registrations. As expected, the trading platform\u2019s lawyers argued in the filing with the U.S. District Court for the Southern District of New York that the tokens it allows investors to buy and sell aren\u2019t securities, putting the company outside the SEC\u2019s purview. The attorneys also argued that the SEC hadn\u2019t made its own rules clear, or given Coinbase the proper notice that the agency believed the company was violating the law.<\/p>\n<div class=\"paywall\">\n<p>The SEC didn\u2019t immediately respond to a request for comment. <\/p>\n<p>The court battle could take months or even years to play out, as the agency and the crypto platform spar over what crypto tokens are securities. After the SEC sued the company on June 6, Coinbase Chief Legal Officer Paul Grewal said the company would \u201ccontinue to operate our business as usual.\u201d<\/p>\n<p>But investors also should pay attention to a lesser known action that could come to a head as soon as the first week in July. On the same day the SEC sued Coinbase, a group of 10 state securities regulators including those of Alabama, California, and New Jersey brought a coordinated set of actions against the company alleging that its \u201cstaking\u201d product is a security that needs to be registered. With staking, Coinbase allows investors to post tokens they own in exchange for yield, which the company takes a cut of.<\/p>\n<p>Some of those state actions require Coinbase to show that its product isn\u2019t a security within 28 days or to cease offering it, which would put the deadline at July 4.<\/p>\n<p>The regulators can extend the deadline, but the elimination of staking would be a substantial hit to the platform\u2019s revenue.<\/p>\n<p>\u201cWe think it is highly unlikely that COIN will be able to convince the states that their concerns are misplaced,\u201d wrote Berenberg Capital Markets analyst Mark Palmer in a research note on Thursday, noting that staking was nearly 10% of the platform\u2019s net revenue in the first quarter. Berenberg has a Hold rating on the stock.<\/p>\n<p>Coinbase didn\u2019t respond to a request for comment. Executives in the past have said the company doesn\u2019t believe the staking product is a security and that, in any case, the company is seeking to diversify revenue sources so that it makes profits even as crypto goes through various cycles and regulatory difficulties.<\/p>\n<p>Coinbase wouldn\u2019t be the first company to halt staking services in the U.S. In February, competitor Kraken agreed to end staking for U.S. customers and pay a $30 million fine to the SEC. Coinbase executives at the time said they believed their company\u2019s product was substantially different from what Kraken offered.<\/p>\n<p>Write to Joe Light at joe.light@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/coinbase-crypto-stock-price-sec-court-6f2789a9?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto trading platform Coinbase just took the next step in a crucial court battle that may take years to play out. But investors should be wary of a less closely watched action that could come to a head in mere weeks. Late Wednesday, Coinbase (ticker: COIN) filed a response in court to allegations from the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":29285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-29284","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Coinbase Begins SEC Court Fight, But Another Legal Threat Looms | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Crypto trading platform Coinbase just took the next step in a crucial court battle that may take years to play out. 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