Coinbase drops 15% in pre-trading after SEC announces lawsuit

Quick Take

  • Coinbase shares plummeted by more than 15% amid an SEC lawsuit.

The United States Securities and Exchange Commission announced it was suing Coinbase. The exchange's shares immediately sank by more than 15% in pre-trading. 

The news dropped less than 24 hours after the SEC also announced it was suing Binance, alleging the world's largest crypto trading platform and affiliated companies misled customers and misdirected funds to a separate investment fund owned by the company's CEO, Changpeng 'CZ' Zhao. After the news, Coinbase's shares were down as much as 12% on Monday. The U.S.-based company trades on the Nasdaq.

Following Monday's Binance announcement, Berenberg Capital Markets’ analyst Mark Palmer reiterated he was advising investors to proceed carefully when it comes to Coinbase shares, in part, to the risk of the SEC potentially targeting the exchange.

“Our cautious stance toward Coinbase … is largely based on our belief that it is likely that the SEC will bring an enforcement action against the company soon.” 

This isn't Coinbase's first time locking horns with the SEC. Last year the exchange ran by CEO Brian Armstrong petitioned the SEC to create new rules tailored to digital assets. In April, already under a publicly-acknowledged investigation by the agency, Coinbase took a gamble and filed a lawsuit against the SEC, hoping to force the regulator to respond to its petition.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

RT Watson is a senior reporter at The Block who covers a wide array of topics including U.S.-based companies, blockchain gaming and NFTs. Formerly covered entertainment at The Wall Street Journal, where he wrote about Disney, Netflix, Warner Bros. and the creator economy while focusing primarily on technological disruption across media. Previous to that he covered corporate, economic and political news in Brazil while at Bloomberg. RT has interviewed a diverse cast of characters including CEOs, media moguls, top influencers, politicians, blue-collar workers, drug traffickers and convicted criminals. Holds a master's degree in Digital Sociology.


To contact the editor of this story:
Adam James at
[email protected]