Bitcoin and Ether Take SEC Crackdown On The Chin

Coinbase stock tanked immediately when word broke of the SEC’s latest threats, but not bitcoin and ether

March 24, 2023 07:37 am

Shutterstock.com/Mark Van Scyoc, modified by Blockworks

Bitcoin and ether mostly held their ground as Coinbase disclosed it had received an SEC Wells notice alleging potential securities violations.

The top-two cryptocurrencies even clawed back earlier losses, climbing 4% and 4.7%, respectively, on Thursday. Bitcoin is now at its highest point since last June.

Coinbase stock, on the other hand, immediately sank 20% on news of the Wells before recovering slightly. It’s however still up around 13% over the past month and nearly double year to date.

The securities watchdog is showing renewed focus in pursuing action with little mediation. Last month saw a settlement with San Francisco-headquartered exchange Kraken over its staking-as-a-service product s.

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Bitcoin and ether are still up more than 20% over the past month, with recent rallies coinciding with failures at US banks Signature and Silicon Valley Bank. Although, markets corrected Friday morning, by 2%.

A “reprehensible amount of resources” have been spent in the US attempting to engage with the SEC, Sheila Warren, CEO of the Crypto Council for Innovation told Blockworks in an emailed statement.

Coinbase’s chief counsel said the firm had directed millions to legal support for SEC proposals and repeatedly requested SEC feedback. “We got none,” Paul Grewal said in a blog post.

On the other hand, more direct SEC action against Tron founder Justin Sun on Wednesday tanked TRX up to 13%. Other tokens tied to the crypto entrepreneur dropped, too, such as bittorrent and huobi token.

For what it’s worth, China’s ban on bitcoin in May 2021 triggered a far steeper sell-off — with BTC falling more than 30% on the month. Bitcoin bounced hard, topping out at $69,000 by November.

“We are seeing big demand coming from institutions,” Guillaume Chatain, head of institutional sales at Coinbase said during a fireside chat at Paris Blockchain Week on Thursday. “Hedge funds want to take advantage of the volatility.”

Updated Mar. 24, 2023 at 7:59 am ET: Added price context.

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