When it rains it pours. As we all should know, Coinbase is being sued by the SEC over issuance and offering of unregistered securities. This seems to include a number of listed tokens as well as mainly the fact that Coinbase was one of the only exchanges who continued their staking services after the SEC started charging and fining everyone else like the likes of Kraken and Gemini, who had stopped these services to US investors after the fines and charges.
Coinbase has also received action from 10 different states: AL, CA, IL, KY, MD, VT, NJ, SC, WA, AND WI. This is a Show Cause Order issued (to be settled in Alabama courts) as the result of multi-state action by regulators in ten states. The Show Cause order is exactly what it sounds like: Coinbase has 28 days to show cause as to why they should not be issued a cease and desist order over offering unregistered securities that related to their staking services with first registration of those securities.
https://preview.redd.it/169tt12eol4b1.png?width=1024&format=png&auto=webp&v=enabled&s=cb91c41179bda971b0ffa7f4954b84ce38f6ff37
Per Coindesk, referencing Nansen, Coinbase has seen losses of at least 500M as of yesterday. This number would have likely risen today.
Sources:
https://asc.alabama.gov/News/2023%20News/6-6-2023_Coinbase.pdf
https://www.coindesk.com/markets/2023/06/06/coinbase-traders-withdraw-600m-in-a-day-amid-sec-lawsuits/
This is a friendly reminder that Kraken Support will never DM you first, ask for your username or password, or ask you to transfer funds. Kraken has its own subreddits, r/KrakenSupport and r/Kraken, and their Support Center.
Ping for verified users associated with Kraken: /u/krakensupport /u/krakenexchange
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
Losing $600M in deposits sounds like a bad thing but in reality its $600M worth of people realizing they shouldnt hold their money on an exchange
Imagine the counter sue for damages once the SEC gets their ass handed to them in court 👀
Well shit
Using logic of SEC and their way of thinking, could Coinbase sue them now for manipulating the market? I mean, losing $600M is not a small amount..
Man, coinbase is really getting it up the cornhole. Doesn’t seem fair. Almost seems like a synchronized attack.
These actions were coordinated by the SEC as part of Operation Choke Point 2.0.
GG thinks we don’t need anymore digital currency and generally speaking we probably don’t, but this is the type of shit that stifles innovation where new tech can’t come to market and compete with existing tech as easily.
600m in withdrawals. Saying that they lost 600m in deposits sounds like they stole 600m of customers money.
I was pleasantly surprised to not find NY in that list. NY is generally seen as hostile to Crypto. Remember when we were all up in arms over the NYDFS and their bitlicense? Well, Coinbase has one, and so it seems like they can’t very well jump on this bandwagon when they’re already regulating Coinbase.
This is how the government is trying to control exchanges, by trying to FUD them with court cases.
The SEC is the most annoying organisation ever.
Can anyone recommend a user friendly cold wallet to get my coins off Coinbase? Cold wallet is the safest right.
They need to leave coinbase alone, they are one of the few CEXs that has jumped through all the hoops to be registered in NYS which is one of the strictest states in america when it comes to regulation and legislation in general.
If the tyrants who run this state saw Coinbase fit to operate here, that means a lot. Not even Kraken operates in NY.
Go after THE REAL CRIMINALS, not the legitimate businesses that attempt compliance at every turn
Coordinated attack. Gary Gensler put in a lot of work on this one. I hope he knows what he’s doing, cos he’s about to bring down the biggest crypto exchange in the US to it’s knees.
u/OneThatNoseOne When it rains, it pours? Stop stealing quotes from “Gone in sixty seconds”😄
I’m a small artist that sells NFTS. It’s incredibly empowering and I would never be able to sell my work this much without crypto.
It’s not just grifters, rich crypto bros, and gamblers that get hurt by this. It’s also people like me.
looking more and more as a targeted attack
My cynical ass can’t stop thinking this is a orchestrated atack from SEC and others regulators.
The SEC is going to succeed with pushing crypto to off shore havens where they’re going to have no control and face international competition against the USD. Way to go.
I swear to fuck… if my state fucks this up for me and kills my last exchange in-state, we will be hoisting the black flag and singing shanties me harties.
Usa is truly on its way out
On the upside, there will come a day when the SEC has tried to ban everything it can get its hands on, and the bad news flow from the US will cease. Of course, by that time, the entire crypto industry will be located overseas, where the US will no longer be able to export its CBDC dollars. If Gary had more feet, he’d shoot those too.
Coinbase made their bed when they kept listing obvious scams, rugpulls, and centralized garbage while ignoring projects that are clearly aligned with sound cypher-punk philosophy that are outside the SEC’s jurisdiction.
They could have listed good projects like RVN, ERG, FLUX, KAS, etc but instead kept choosing to list whatever scamcoinElonRugpull-Inu ERC-20 token that comes along.
I have no sympathy for them. They literally tied their own noose. They were supposed to have the highest of standards and instead jumped neck deep into garbage.
It’s odd how Gary Gensler has made nearly 2,000 videos about crypto since 2019 on one of YouTubes best channels. So odd.
So SEC has a clear rule on what a security is and they have a list right? Right?
This will push more into DeFi and that can be a good thing
What are SEC arguments for saying a certain crypto is a security?
Exciting news! Huge centralised entities must be on fire and depart out of fundamentally decentralised Crypto world.
Use DEXes, atomic swaps instead, or at least a random small centralised exchange from an aggregator like https://kycnot.me, https://trocador.app, etc.
In failing to destroy crypto the SEC will only prove how powerful it is
Time to sue back for financial loss
If these companies survive this onslaught, they’ll become bulletproof and the world will move towards them (well the whole world except for the US)
So, theoretically, what would happen if CB did get a cease and desist?
For the financials here, Coinbase going insolvent is not out of the question, despite being one the few remaining good actors in the space.
Altman-Z score is at .07-.11 which shows the firm is under distress and could be bankrupt in 2 years. A score of 3 shows healthy credit.
Piotroski F-score is 1 (where 9 is the healthiest balance sheet)
Assets to liabilities is a little over 1.
Guess the wildcard here is how many of their pre-IPO VCs are on standby with more capital or what kind of financing can they get? If they continue to hemorrhage funds their already paltry cash flow situation will get bleak but I’d love to hear others thoughts.