A financial analyst has warned that US-based crypto exchange Coinbase faces an “existential risk” as the Securities and Exchange Commission (SEC) continues its crackdown on the crypto industry.
The analyst’s warning followed renewed concerns among Coinbase investors that tokens listed on the exchange could be considered securities under SEC rules, a change in classification that would bring with it a host of new regulatory requirements, Bloomberg reported. informed of on Thursday.
“Trading could be materially different than it is today,” Stephen Glagola, an analyst at stock brokerage TD Cowen, told Bloomberg.
Glagola said the company noted it “could potentially require Coinbase to spin off its entire customer-facing business.”
“There is just existential risk,” said the analyst, who currently advises investors to sell Coinbase stock.
Coinbase trades on the Nasdaq exchange under the ticker COIN.
The stock closed higher for the day on Thursday after witnessing heavy selling at the beginning of the week. Since the beginning of the year, COIN has been up almost 46%.
Coinbase expands internationally
At the same time regulatory pressure is heating up at home, Coinbase has announced ambitious plans for international expansion, starting with an international Registered Derivatives Exchange in Bermuda,
“As more and more markets move forward with regulatory frameworks to become crypto hubs, we believe the time is right to launch this international exchange,” Coinbase said in a blog post. , Go Broad Global Expansion Strategy.”
Coinbase issued a so-called Wells notice in March of this year – From the SEC – A letter that usually precedes enforcement action.
The exchange responded to the letter by claiming that it was the SEC that “did not follow the law” by allowing companies like Coinbase to register.
Last week, Coinbase announced That it had taken yet another step in its fight to bring regulatory clarity to the US, it needed to get the clarity it needed by filing its lawsuit against the SEC.