Bulletin: For Coinbase, The SEC's Lawsuit Is Another Regulatory Setback

TORONTO (S&P Global Ratings) June 7, 2023--S&P Global Ratings views the SEC's lawsuit against Coinbase, filed yesterday, as a continuation of a series of regulatory setbacks for Coinbase, consistent with our negative outlook on the rating. As we stated in our January 2023 article, we could lower the ratings if increased regulation proves disruptive for the company's business model, though we believe considerable uncertainty remains. Specifically, the SEC has disclosed in its lawsuit a list of 13 crypto assets it believes are securities (including Cardano, Solana, Polygon, and Filecoin). But it has also indicated that this list is not exhaustive. If a court decision corroborates the SEC's claim that the specified digital assets are securities, that would necessitate Coinbase delist

...June 7, 2023 TORONTO (S&P Global Ratings) June 7, 2023--S&P Global Ratings views the SEC's lawsuit against Coinbase, filed yesterday, as a continuation of a series of regulatory setbacks for Coinbase, consistent with our negative outlook on the rating. As we stated in our January 2023 article, we could lower the ratings if increased regulation proves disruptive for the company's business model, though we believe considerable uncertainty remains. On June 6, the SEC filed a complaint in the federal court of Manhattan, alleging that Coinbase operated an unregistered exchange, broker, and clearing agency, depriving investors of significant protections. These charges follow the SEC's March 2023 Wells Notice to the company that alleged violations of federal securities laws related to its activities in trading of digital assets, staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet. The SEC lawsuit requests the court that Coinbase be ordered to pay civil fines, give up any ill-gotten...

Bulletin