SEC’s Binance lawsuit may occur on Coinbase ─ German investment bank analyst points out | coindesk JAPAN | Coindesk Japan

On June 5, the U.S. Securities and Exchange Commission (SEC) sued cryptocurrency exchange Binance and its CEOs for violating federal securities laws. Marc Palmer, an analyst at German investment bank Berenberg, said the SEC had some similarities to previous charges against Bittrex and Kraken. He said Coinbase could be sued on similar charges in the future.

Coinbase has already been warned by the SEC that at least 37% of its net revenue could be at risk if sued.

Binance Lawsuit Slams Crypto Asset Markets All Over

The SEC has sued Changpeng Zhao, the founder and CEO of Binance, the operator of Binance and Binance US. He argued that the offering of Binance Coin (BNB) and stablecoin Binance USD (BUSD) constitutes offering unregistered securities and that the staking service violates securities laws.

The lawsuit caused a sharp drop in the cryptocurrency market on the 5th, with Coinbase’s share price dropping about 9.1% to close at $58.71.

Risks for Coinbase

In March, Coinbase was warned by the SEC that enforcement actions related to listing a potentially unregistered security could be imminent. “We estimate that at least 37% of net revenue would be at risk if the SEC targeted Coinbase’s cryptocurrency trading and staking,” Palmer said, giving Coinbase a “neutral” rating. He said he has a price target of $55.

Coinbase currently has 11 buy, 7 neutral and 6 sell ratings, according to financial data provider FactSet.

“We will invest in Coinbase’s ability to successfully change its business model and geographic focus if, as a result of SEC enforcement actions, it is forced to reduce or cease most of its operations in the U.S.,” Pulver said. The home should be the focus,” he said.

｜Translation: coindesk JAPAN
｜Editing: Rinan Hayashi
| Image: Brian Armstrong, CEO of Coinbase (captured by CoinDesk with permission from the company)
｜Original: Binance SEC Lawsuit Could be Preview of What Coinbase May Face, Berenberg Says