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Coinbase Shares Drop 10% Following SEC’s Suit Against Binance
Bitcoin (BTC) dropped below the $26,000 mark, while the shares of bitcoin mining stocks fell as well.
Updated Jun 6, 2023, 5:23 p.m. Published Jun 5, 2023, 4:25 p.m.
Shares of Coinbase (COIN) were down 10.3% after news broke that the Securities and Exchange Commission (SEC) was suing Binance on allegations of violating federal securities law on Monday.
“Coinbase shares are down sharply as it looks like U.S. regulation will deem many cryptos as securities,” said Edward Moya, senior market analyst at foreign exchange Oanda. “Coinbase wants regulatory clarity and it seems the SEC is going to cripple large parts of the cryptoverse.”
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Coinbase stock fell more than 5% right after the filing was released and then continued to fall. Meanwhile, the price of bitcoin fell more than 5% to below $26,000. Shares of MicroStrategy (MSTR), which holds a vast amount of bitcoin on its balance sheet, fell almost 9%, while the shares of several bitcoin mining stocks dropped as well. Riot Blockchain (RIOT) and Marathon Digital (MARA) both fell more than 9%, while Bitfarms (BITF) dropped more than 6%.
The SEC is accusing Binance of offering unregistered securities and staking services to the general public, among other allegations, as U.S. lawmakers double down on enforcement actions against crypto companies.
In March, Coinbase itself received a warning from the SEC that it may soon receive enforcement action tied to its listing of potential unregistered securities. The exchange has since doubled down on its presence in Canada, which it says has clearer rules for crypto firms than the U.S., making it easier to operate in the country.
UPDATE (June 5, 17:32 UTC): Added declines of bitcoin mining stocks.
UPDATE (June 5, 17:42 UTC): Added quote from Edward Moya.
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