After many months of warnings, Coinbase is finally buckling under the weight of the SEC. If the crypto exchange platform was already showing bad numbers, it’s nothing compared to what the company is currently facing. What impact will the SEC have on its crypto-stake programs?
Coinbase under SEC scrutiny over its staking programs
The SEC has had its sights set on Coinbase for over a year. Indeed, the Securities Exchange Commission (SEC) has conducted an investigation into a hypothetical trading platform scam strategy. The results of the investigation revealed that several parts were not registered according to the standards of the authority. After several months of arduous investigation, Coinbase has received quotes to appear.
According to a quarterly regulatory filing, these requests relate to the asset listing process, staking programs as well as the classification of stablecoin products and assets. To make up for losses due to market downturns, many exchanges offer staking services.
These allow users to not only help secure the blockchain, but also to generate revenue on certain crypto assets by delegating them. Except that at Coinbase, blockchain rewards revenue from staking is larger than trading revenue in the second quarter.
Big pressure for the crypto platform
The platform has been accumulating bad polls for some time. Between the SEC investigation, another against a former manager of the crypto company and its poor results, Coinbase is gradually losing its credibility. Although it has diversified its services, the platform really can’t get its head above water. Staking revenue represented approximately 8.5% of the platform’s gross revenue in the second quarter.
During the same quarter, the service fell nearly 16%. Currently, Coinbase has to fight on all fronts and there is no end in sight. Meanwhile, its direct competitors continue to grow and attract investors.
Looks like a bad wind is blowing on Coinbase right now. Indeed, the crypto platform is accumulating problems and so far, no solution seems to be able to stop the SEC. One would even be tempted to wonder if the regulatory body does not intend to do to the crypto company what it has already done with Ripple. Either way, Coinbase is in deep trouble.
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