Monat: März 2023

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NASDAQ to launch its crypto custody services by the end of Q2: Bloomberg

Key takeaways

  • NASDAQ said custody is the first step in its digital asset push.

  • The stock exchange operator plans to launch its crypto custody service before the end of next quarter.

  • More traditional financial institutions are making a push into the cryptocurrency space.

NASDAQ’s crypto custody service will launch next quarter

Nasdaq Inc. is planning to launch its custody services for digital assets by the end of the second quarter of 2022. This latest development is according to a report by Bloomberg on Friday.

The stock exchange market operator joins a host of other traditional financial firms that are making their way into the cryptocurrency space. According to the report, NASDAQ is pushing ahead to get the necessary technical infrastructure and regulatory approvals in place.

Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, revealed this during an interview in Paris. The NASDAQ exec added that the firm has applied to the New York Department of Financial Services for a limited-purpose trust company charter, a licence that would allow it to oversee the business. 

This latest cryptocurrency news comes after the firm revealed its intention to enter the crypto space. In September 2022, NASDAQ announced that it would offer custody services for Bitcoin (BTC) and Ether (ETH) to institutional investors.

The firm went ahead to hire Ira Auerbach, a former Gemini employee, to head the new Nasdaq Digital Assets unit

More financial institutions could enter the crypto market soon

The recent collapse of Silvergate and Signature banks has left a space in the cryptocurrency space, and experts believe more traditional financial companies, such as NASDAQ, could enter to fill the gap. 

NASDAQ’s entry into the cryptocurrency space could prove a positive signal for mainstream cryptocurrency adoption, a situation that could help attract more companies to the market. 

The post NASDAQ to launch its crypto custody services by the end of Q2: Bloomberg appeared first on CoinJournal.

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Coinbase CEO says SEC’s notice wasn’t entirely unexpected

  • Coinbase disclosed a Wells Notice from the US Securities and Exchange Commission (SEC).
  • A Wells Notice usually comes before an enforcement action.
  • Coinbase CEO Brian Armstrong says the company isn’t surprised with the SEC’s move.

Coinbase CEO Brian Armstrong has commented on the company’s announcement that it had received a Wells Notice from the US Securities and Exchange Commission (SEC), saying via Twitter Spaces that the exchange wasn’t entirely surprised at the regulator’s action.

Coinbase had 30 meetings with SEC, without feedback

As reported on CNBC on Friday morning, Armstrong and other executives say they had engaged with the SEC before.

“Over a series of 30 meetings in the last nine months, we met with the SEC and shared details of the business and answered every question,” the Coinbase CEO said.

According to Armstrong, Coinbase spent millions of dollars in legal fees as they tried to explain everything about its business, including digital asset listings and staking rewards. He added that the SEC did not provide feedback over the nine months, noting that the agency cancelled, at the last minute, a meeting it had set up for that purpose.

“That was the first feedback we got in 30 meetings. The day before that meeting they cancelled the meeting [and] we didn’t know why. And then a few weeks later – boom, we get served with the Wells Notice,” he added.

On Thursday, Armstrong tweeted that the SEC reviewed Coinbase’s business and approved its IPO. 

Coinbase stock plummets 

The Wells Notice is a signal that the securities regulator is considering enforcement action against the largest US-based cryptocurrency exchange. Accordingly, investor reaction to the news saw the publicly-listed company’s shares plunge to lows of $61.87.

The Coinbase stock was down nearly 15% over the past five days.

The post Coinbase CEO says SEC’s notice wasn’t entirely unexpected appeared first on CoinJournal.

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Coinbase stock down 25% as regulators move in and crypto environment worsens again


Key Takeaways

  • Coinbase was issued with a Wells notice this week and now awaits formal charges from the SEC
  • Regulators continue to move in on US crypto companies, hurting Coinbase’s prospects
  • The exchange laid off its second round of employees in January, shut down activities in Japan due to “market conditions”, and saw its share price plummet throughout 2022

Coinbase just can’t catch a break. 

I wrote a deep dive on the struggling crypto exchange last October, when founder and CEO Brian Armstrong sold 2% of its stake. But things have only gotten worse since then. 

It laid off 20% of its workers in January (I analysed what this meant for the company here), six months after it had already cut 18%. It also terminated its Japanese operations in January, citing “market conditions”. 

Despite this, the stock had been rebounding in 2023 as a softer forecast of the future path of interest rates was benefitting the tech sector at large. And then, the SEC waded in to end the party this week. 

SEC alleges Coinbase is violating securities law

The SEC issued Coinbase a Wells notice, warning that it was potentially violating US securities law. The share price has fallen 24% in the two days since.  

“Based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet,” Coinbase said in a regulatory filing. “The potential civil action may seek injunctive relief, disgorgement, and civil penalties.”

The market now awaits the exact charges becuase a Wells notice, as Armstrong noted in his tweet above, typically precedes legal action. 

Coinbase chief legal officer Paul Grewal also waded in, noting that Coinbase was confident in the face of the charges. 

“Although we don’t take this development lightly, we are very confident in the way we run our business – the same business we presented to the SEC in order for us to become a public company in 2021,” he posted. 

Regulatory environment continues to worsen for crypto

Despite Coinbase’s defiance, at least in public, the reality is that this marks just the latest move by US regulators to clamp down on crypto. 

Recent months have seen the dramatic shutdown of the Binance-branded stablecoin BUSD, a top 10 cryptocurrency, a fine for leading exchange Kraken relating to disclosures around its staking problem, and now this Wells notice for Coinbase. 

Then there is the banking turmoil. While not caused by crypto, the shutdown of SVB, Silvergate and Signature means the main crypto banks have evaporated into thin air. That starves the industry of vital fiat on-ramp and is an unquestioned headwind going forward. 

Whether you view any of the above as unfair or not, the bottom line for Coinbase is that the country in which it is headquartered, the United States, is a significantly more hostile environment for the crypto industry than it was a few months ago. That is obviously bad news for investors, and for the business as a whole. 

What happens next?

Going forward, it is hard to know what will happen. It does appear, however, as if regulators are intent to rein crypto in after the series of scandals that shook the market (and caused billions of losses for customers) last year, including LUNA, Celsius and most recently FTX. 

Before this latest move, the Coinbase share price had been reaping the positivity around a bounceback for Bitcoin, which is currently trading at $28,000, nearly double what it was in the aftermath of the FTX collapse in November. 

That follows the wider tech resurgence, as the market is betting that the Federal Reserve is largely done with interest rate hikes and the uber-tight monetary policy of the last year. 

Ultimately, Coinbase’s fate will be tied to those macro conditions, as well as the Bitcoin price, as it always is. But so too will it depend on regulators pulling back from their punitive stance over the last few months, and right now that doesn’t appear likely. 

The post Coinbase stock down 25% as regulators move in and crypto environment worsens again appeared first on CoinJournal.