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Coinbase Receives Positive News on SEC Lawsuit Dismissal
Regulatory Overhang Lifting for Coinbase
Coinbase recently announced that the U.S. Securities and Exchange Commission (SEC) is set to dismiss its lawsuit filed in June 2023. This move is seen as a significant win for the company and the broader crypto industry. According to analysts at H.C. Wainwright & Co., the dismissal of the lawsuit would lift a major regulatory overhang on Coinbase’s stock and signal a shift towards a more crypto-friendly stance from the SEC.
SEC Lawsuit Background
The SEC’s lawsuit alleged that Coinbase offered unregistered crypto asset securities and operated illegally as an exchange, broker, and clearing company. However, the expected dismissal of the lawsuit would negate this ongoing headwind on Coinbase’s stock.
Analysts’ Expectations
Analysts Mike Colonnese and Dylan Scales expect the dismissal to significantly reduce costly legal fees and open doors for business expansion, particularly in staking and crypto listings. They noted that the dismissal of Coinbase’s case would eventually lead to an expansion of the company’s staking business, which had been constrained since the enforcement action was issued.
The analysts also see the potential for an acceleration of new crypto listings on Coinbase’s platform, which would benefit subscription and services revenues and transaction revenues, respectively. Here are some expected outcomes of the lawsuit dismissal:
- Reduced legal fees
- Expansion of staking business
- Acceleration of new crypto listings
- Increased subscription and services revenues
- Boost in transaction revenues
Coinbase Stock Performance
Coinbase’s stock initially opened around 1% higher on Friday morning but quickly moved into the red due to news of a major hack at Bybit, which spooked the entire crypto industry. Coinbase’s stock closed on Friday at $235.37, down 8.2%.
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