Coinbase stock and price target increase despite SEC charges and lawsuit.
The stock price of Coinbase (NASDAQ: COIN) increased by approximately 6% last week, along with the average price target expected by analysts. The major cryptocurrency exchange’s stock rose 5.93% over the period, closing at $55.59.
MarketWatch data shows that despite a 26.86% drop over the last three months, COIN has gained more than 57% in year-to-date (YTD) gains. Additionally, COIN has lost 2.10% of its value in the past month. Nonetheless, the stock has still risen by 8.53% over the past year.
Furthermore, as of Sunday, The Block Research compiled data that shows the average analyst target is $69.70. This figure increased from $69.17 after a broker removed its “Sell” rating on COIN.
In an official press release published last week, Coinbase announced that it had repurchased $64.5 million worth of Convertible Senior Notes (0.50% of the Notes) at approximately 29% to par value. The exchange stated that the repurchase should be completed around June, depending on specific closing conditions.
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Coinbase Stock and Price Target Rises Despite Regulatory Problems
Despite accusations and an indictment from the United States Securities and Exchange Commission (SEC), Coinbase’s stock and price target remain relatively healthy. Early in June, the SEC filed a lawsuit against Coinbase, accusing the major exchange of conducting business as an unregistered national securities exchange and broker since at least 2019.
According to the SEC’s indictment, Coinbase provided services as a broker, clearing agency, and exchange without registering any of the services as required. Additionally, the SEC criticized the exchange’s staking-as-a-service program.
The indictment stated that Coinbase “has been engaging in an unregistered security offering through its staking-as-a-service program” since 2019. The Commission stated that offering these services without adequate registration is illegal. In the indictment, SEC Chair Gary Gensler claimed that Coinbase deprived investors of necessary protections, such as proper disclosure, and protection against conflicts of interest. The SEC named other protective measures, including fraud and manipulation prevention rulebooks, as well as routine SEC inspections.
According to SEC Division of Enforcement Director Gurbir S. Grewal, “while Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled. Today’s action seeks to hold Coinbase accountable for its choices.”
The Coinbase lawsuit came shortly after the SEC sued Binance. The Commission accused Binance of misappropriating customer funds through a separate entity. Additionally, the SEC claimed that Binance did not adequately restrict US customers from trading outside Binance US.
SEC Had Issued a Wells Notice
In March, the SEC issued a Wells Notice to inform the exchange of potential charges. According to the Commission, Coinbase had breached US securities law. However, Coinbase was largely unaffected by the threat. In an official statement, the company’s chief legal officer, Paul Grewal, stated that Coinbase had been seeking clarity from the Commission to no avail. Grewal said that the exchange would “welcome a legal process” to provide much-needed clarity.
