Coinbase (NASDAQ:COIN) Faced Trading Suspension Risk Prior to the SEC Lawsuit

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U.S. crypto exchange platform Coinbase said today that the SEC asked the company to suspend trading in all cryptocurrencies except bitcoin before initiating a lawsuit in June.

The U.S.-based Securities and Exchange Commission (SEC) asked Coinbase Global, Inc. (NASDAQ:COIN) to suspend trading in cryptocurrencies other than bitcoin amid regulatory scrutiny. This request was made before the SEC filed a lawsuit against Coinbase in June 2023. The Financial Times reported today that according to Coinbase’s chief executive, Brian Armstrong, the company was advised to halt trading in response to the SEC’s legal action, which alleged that Coinbase had not properly registered as a broker with the regulatory authority.

The SEC identified 13 cryptocurrencies, predominantly with low trading volumes on Coinbase’s platform, as securities. It claimed that by providing these cryptocurrencies to customers, Coinbase falls under the regulatory authority of the agency.

Armstrong, commented, “We really didn’t have a choice at that point delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the U.S.”

Until now, the supervision of the crypto industry has been uncertain, with both the SEC and the Commodity Futures Trading Commission (CFTC) vying for control. Earlier in March 2023, the CFTC started a lawsuit against Binance Holdings, which is the largest exchange for cryptocurrencies.

Coinbase Stock Price Prediction

On TipRanks, COIN stock has a Hold rating based on seven Buy, eight Hold, and seven Sell recommendations.

At an average target price of $71.11, analysts are predicting a 25% downside in the share price, as it is already trading at higher levels. YTD, the stock has gained a whopping 182%.