Bulletin: Persistent Regulatory Uncertainty Overshadows Coinbase?s Resilient Operating Performance In The Second Quarter

TORONTO (S&P Global Ratings) Aug. 11, 2023--S&P Global Ratings today said that while Coinbase's second-quarter operating performance was resilient amid the ongoing crypto winter, persistent regulatory uncertainty continues to underpin our negative outlook on the company. Coinbase is seeking a dismissal of the lawsuit filed by the SEC in June that alleged the company operated as an unregistered exchange, broker, and clearing agency. Although both the Ripple and Terraform Labs decisions reflect a view that tokens by themselves are not investment contracts, which is part of the position Coinbase asserts in its motion, it remains unclear whether these efforts will be successful. If the decline in USDC market capitalization continues, it would pressure Coinbase's revenues in the second half of

...August 11, 2023 TORONTO (S&P Global Ratings) Aug. 11, 2023--S&P Global Ratings today said that while Coinbase's second-quarter operating performance was resilient amid the ongoing crypto winter, persistent regulatory uncertainty continues to underpin our negative outlook on the company. Two contrasting outcomes from recent court cases show the continuing uncertainty regarding the classification of certain listed crypto assets as securities. A federal judge ruling during mid-July in the SEC's case against Ripple asserted that the XRP token listed on exchanges for buying and selling to anyone was not a securities transaction, but direct sales of the XRP token to institutional clients are securities transactions. While the case could have favorable implications for Coinbase and the crypto industry, a contrasting opinion was issued in a late July ruling by a judge in the SEC's case against token issuer Terraform Labs, alleging that the Terra USD token may be a security when sold to retail investors....

Bulletin