The problems seem far from over for the cryptocurrency exchange platform Coinbase Global, Inc. (COIN). After the SEC announced insider trading charges on a former COIN employee, the company was subject to a probe on whether it allowed…
American users to trade unregistered securities.
COIN offers retailers the primary financial account in the crypto economy, a marketplace with a pool of liquidity for transacting in crypto assets for institutions, and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto-asset payments.
On July 21, 2022, the SEC announced insider trading charges against COIN’s former employee Ishan Wahi, accusing him of leaking information to his brother Nikhil Wahi and friend Sameer Ramani that COIN would list at least 25 crypto assets for trading on its platform.
Just before COIN’s announcement, the former employee’s brother and a friend bought the tokens and sold them at a profit of $1.10 million right after the official listing. The trio is also facing wire fraud charges. The agency did not allege any wrongdoing on COIN’s part.
On July 21, 2022, the SEC claimed that nine of the 25 tokens allegedly traded in the insider trading scheme were securities. The company was later hit by an SEC probe on whether it let its users trade digital assets that were not registered as securities.
COIN’s Chief Legal Officer Paul Grewal said, “We are confident that our rigorous diligence process- a process the SEC has already reviewed – keeps securities off our platform, and we look forward to engaging with the SEC on the matter.”
COIN’s stock has declined 75.1% in price year-to-date and 73.5% over the past year to close the last trading session at $62.70.
Here’s what could influence COIN’s performance in the upcoming months:
Disappointing Financials
COIN’s total revenue declined 35.2% year-over-year to $1.16 billion for the first quarter ended March 31, 2022. The company’s operating loss came in at $554.46 million, compared to an operating income of $987.71 million.
Its net loss came in at $429.65 million, compared to a net income of $771.46 million in the year-ago period. Also, its loss per share came in at $1.98, compared to an EPS of $3.05 in the year-ago period. Furthermore…
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