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SEC's 'Smart' Strategy Against Coinbase Revealed: Details

Thu, 06/08/2023 - 10:37
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Godfrey Benjamin
Crypto analyst believes SEC is playing financial game against SEC that will give it competitive edge
SEC's 'Smart' Strategy Against Coinbase Revealed: Details
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With Coinbase Global Inc and the United States Securities and Exchange Commission (SEC) currently in court over the petition filed by the trading platform to gain clarity on rules for the industry from the regulator, top analyst Ran Neuner has pointed out the smart play by the commission to beat the crypto exchange.

Despite the lawsuit filed by Coinbase, the SEC also charged the trading platform this week with supporting the trading of unregistered securities tokens. This has complicated the legal struggles for the crypto exchange despite its readiness to "represent" the industry in court as chief executive officer, Brian Armstrong said earlier.

SEC's subtle gameplay

According to Neuner, the SEC is trying to push the crypto trading firm into incurring massive legal fees while "at the same time reducing the tokens they can trade on the platform and choking the on-ramps to hurt Coinbase revenue."

With the regulator declaring tokens like Cardano (ADA), Solana (SOL), Filecoin (FIL) and Cosmos (ATOM) as securities, there is a likelihood that Coinbase will be delisting these assets until their regulatory status is concluded. The exchange did this before when it delisted XRP following the breakout of a legal battle between the coin's affiliated payment firm, Ripple Labs Inc and the market regulator.

Neuner believes the SEC will be able to plan its strategy against Coinbase very well, and the details of its finances as a publicly listed firm will be available for analysis. The pursuit of proper regulations might be costly for Coinbase, but just as Ripple has spent about $200 million in its legal brawl with the regulator, the Armstrong-led exchange appears ready to go all the way.

Cardano Developer Rejects SEC's Claims of ADA Being a Security

Impact on COIN shares

The lawsuit bout is dampening sentiment toward Coinbase shares across the board, however, Ark Invest maintains loyalty and recently capitalized on the slump in COIN to stack up more than $21 million worth of the shares.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.