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

article-image

Blockworks exclusive art by axel rangel

share
  • 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.” 

“The SEC is in for a real fight here,” Tawil said. “What about these nine coins, versus the others that were traded, deemed them ‘securities’ for the SEC?” 

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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (3).png

Research

South Korea is emerging as one of the most important global hubs for regulated digital assets, and Upbit sits at the center of this shift. Naver’s proposed acquisition could create the country’s dominant super app for payments, trading, and digital finance. This report breaks down the numbers, the regulatory tailwinds, the economics of the deal, and why the merger may unlock one of the most attractive asymmetries in Korea’s public markets.

article-image

As DevConnect kicks off in Buenos Aires, Vitalik and friends call for a reset

article-image

GPUs are starting to go dark even as data-center spending doubles — is a bubble on the horizon?

article-image

Risk assets sold off as doubts loom over a December rate cut, with BTC tumbling briefly below $95K this morning

by Carlos /
article-image

Jeff Yass bets that prediction markets could stop wars, Paul Atkins’ announcement on “tokens,” and more

article-image

Lido unveils a new buyback plan while BTC treasury companies slip below mNAV — can either model can truly return value?

article-image

If financial nihilism has driven you into memecoins, zero-day options, and sports betting, consider financial optimism instead