Coinbase Stock Loses 14% as Cryptoassets’ Legal Status Questioned
Coinbase was not listed as a defendant in the lawsuit against the former product manager and his associates, which the SEC announced July 21
Blockworks exclusive art by axel rangel
- The sell-off comes shortly after the SEC classified nine tokens as securities in a complaint against a former Coinbase employee
- Coinbase has a rigorous internal process for classifying tokens, the exchange says
Coinbase stock opened 14% lower at the start of the trading session Tuesday amid ongoing volatility in the crypto market and increasing regulatory uncertainty.
The sell-off comes days after the US Securities and Exchange Commission classified nine tokens as securities in a complaint alleging that a former Coinbase product manager and people close to him used classified information for insider trading.
The lawsuit “could be a catalyst” for the sell-off, David Tawil, president and co-founder of Prochain Capital, said. “However, I believe that it’s a red herring. These nine tokens probably make up very little revenue for Coinbase now or in the future.”
Coinbase has said that it does not list securities — all tokens traded on the platform are internally analyzed and reviewed to ensure this.
“We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” Paul Grewal, chief legal officer at Coinbase, told Blockworks.
Coinbase was not listed as a defendant in the lawsuit against the former product manager and his associates, which the SEC announced July 21. The crypto industry has largely called the classification of the nine tokens as securities “regulation by enforcement.”
Analysts surveyed by stock research firm MarketBeat still rated Coinbase a “moderate buy,” unchanged from one month ago.
COIN was ranked 22th on Fidelity’s list of top buys and sells Tuesday, with 559 buy orders and 308 sells as of 10:18 am ET.
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