Coinbase under pressure: SEC investigations and data scandal weigh on shares

Coinbase under pressure: SEC investigations and data scandal weigh on shares

Coinbase, the most prominent company in the crypto space, recently made headlines by joining the S&P 500. This inclusion was supposed to bring a boost to the stock, but the reality is different. On Thursday, the stock fell 7.2 percent to trade at $244.22. Two main factors come to the fore: the ongoing investigation by the US Securities and Exchange Commission (SEC) and a serious cyber attack on the company. Loud The shareholder An investigation is underway into whether Coinbase may have overstated its user numbers. The focus is on the number of “verified users”, which the company states is over 100 million. However, this key figure also includes people who have only confirmed their email address or telephone number.

The SEC began the investigation about two and a half years ago when Joe Biden was president, and it continues now under the Donald Trump administration. Paul Grewal, Coinbase's general counsel, explained that the number of "verified users" has not been published for some time. Investors should rather focus on the number of “monthly active transaction users” as this metric is more relevant.

Cyberattack poses challenges for Coinbase

In addition to the SEC investigation, Coinbase is facing a cyberattack that stole the data of nearly 100,000 users. Hackers demanded a ransom of $20 million, but Coinbase rejected this demand. Estimates of the financial impact of this attack are as high as $400 million. These developments contribute significantly to the pressure on the share price and lead to increased uncertainty for investors Stock check.

The volatility of crypto stocks, as shown by the current situation at Coinbase, is significant. Despite the challenges, analysts reported that the S&P 500 audition remains significant for Coinbase stock price momentum. Analysts at Oppenheimer set the price target at $293, while Rosenblatt raised it to $300. Goldman Sachs remains neutral with a target of $239 and warns of regulatory risks.

Perspectives for the future

Despite the short-term pressures of the SEC investigation and cyberattack, there is also optimism. The S&P 500 inclusion could attract fresh capital and increase institutional demand for crypto services. There are also new product areas such as derivatives trading, which could open up further sources of revenue.

However, significant risks remain, including cyber security gaps and unclear legal frameworks. The crypto market is known for its volatility, which brings additional uncertainties for investors.

Overall, Coinbase is facing a crucial phase. While the immediate challenges appear significant, the long-term prospects may actually offer potential through S&P 500 inclusion and strategic expansions. Investors are well advised to remain vigilant and monitor developments closely, as opportunities for new entrants could also arise at lower price levels.