The shares of cryptocurrency exchange Coinbase (COIN) have reached an 18-month high following the guilty pleas of rival exchange Binance and its former CEO Changpeng Zhao for money laundering and sanctions violations in the United States.
On November 27, Coinbase closed at $119.77, its highest since May 5, 2022. However, it has seen little movement in after-hours trading. Coinbase shares are up around 256.5% year-to-date, but still down 65% from their all-time high in November 2021.
Binance Settlement Boosts Coinbase
Coinbase’s share surge comes shortly after Binance and Changpeng Zhao settled with the U.S. government for $4.3 billion due to their illicit activities. As part of the settlement, Zhao stepped down as CEO and Binance agreed to compliance monitors for up to five years.
Coinbase’s Windfall from ETFs
In addition to the surge in share prices, Coinbase has also benefited from pending approval for U.S. spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs). Currently, Coinbase serves as custodian for 13 out of the 19 spot crypto ETFs awaiting approval from the Securities and Exchange Commission.
SEC Lawsuit Looms over Coinbase
Despite its recent successes, Coinbase is facing a lawsuit from the SEC alleging that it failed to register with the regulator and listed tokens that violated U.S. securities laws. Coinbase has challenged the SEC’s authority to regulate cryptocurrencies and attempted to dismiss the lawsuit.
Hot Take: Coinbase Benefits from Binance’s Legal Troubles
Coinbase’s shares have surged to an 18-month high following the guilty pleas of Binance and its former CEO for money laundering and sanctions violations. The settlement between Binance and the U.S. government, which included Changpeng Zhao stepping down as CEO, has given Coinbase a boost in the market. Additionally, Coinbase stands to benefit from pending approval for U.S. spot Bitcoin and Ether exchange-traded funds. However, Coinbase is not without its own legal challenges, as it faces a lawsuit from the SEC over alleged securities law violations. Despite this, Coinbase remains a major player in the cryptocurrency exchange industry.
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