Analysts at JMP Securities said on Friday (10th) that the recent US Securities and Exchange Commission (SEC) crackdown on cryptocurrency pledge services (ie STaaS) may spread to Coinbase.
The SEC accused Kraken, the world’s largest cryptocurrency exchange, that its STaaS service was suspected of issuing and selling securities without registration.
Less than 24 hours after Coinbase CEO Brian Armstrong tweeted, the SEC announced the settlement with Kraken. Armstrong’s previous post aroused market rumors that the SEC intends to let US retail investors get rid of cryptocurrency pledge services.
Analysts believe that although this has long been one of the market areas that the SEC has focused on, the particularity of the recent rumors and the SEC’s final action have had a chilling effect on crypto stocks and assets. “Coinbase fell 14% yesterday. Our preliminary view is that The company’s STaaS service may face similar challenges.”
Coinbase (COIN-US) shares fell another 4.26% on Friday to close at $57.09 per share.
Analysts admit that it is difficult to judge the overall impact on the broad market from yesterday’s events alone, but generally speaking, the settlements and disputes related to the topic of STaaS services “highlight the uncertainty of broad general regulation, which has caused industry and Stocks are under pressure.”
While there appears to be no immediate threat to Coinbase’s “Project Earn” due to Kraken’s settlement agreement with the SEC, analysts speculate that the market will not view the SEC’s action yesterday as a one-off event. Therefore, Coinbase and its peers may face challenges from regulatory agencies such as the SEC targeting other related services or products in the future, and this overall uncertainty makes investors panic.
