On February 21, Coinbase announced that the Securities and Exchange Commission will dismiss the June 2023 lawsuit against the crypto exchange.
Although final approval from the SEC committee is still pending, Coinbase management hopes it will be cleared as soon as next week, analyst Mike Colonnese said in the report.
In the SEC lawsuit, Coinbase provided unregistered cryptocurrency securities and was illegally operated as an exchange, broker and clearing company. However, expectations for firing will provide a clear signal that denies the ongoing headwinds on Coinbase's inventory and is changing its stance towards a more crypto-friendly stance.
Regulation overhangs have been lifted, and business expansion was expected
“Today's announcement lifts major regulatory overhangs for stocks,” analysts Mike Colonnese and Dylan Scales wrote in the report. They also look forward to the decision to significantly reduce the costly legal costs and open doors for expanding their business, especially in staking and crypto listings.
“We would also expect that Coinbase's litigation will ultimately lead to an expansion of the company's staking business, which was constrained since the enforcement action was issued,” the analyst said. . “We also see the possibility of accelerating new crypto lists on Coinbase's platform, which will benefit subscription and service revenue and transaction revenue, respectively.”
Coinbase shares rose about 1% on Friday morning as analysts expected a “more positive response” from the news. However, Coinbase's inventory quickly moved to red as news of major hacks on Bybit surprised the entire crypto industry.
Coinbase shares fell 8.2% on Friday at $235.37.
