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Coinbase CEO sold big chunk of company shares a day ahead of SEC complaint

  • Brian Armstrong sold over 29,000 shares ahead of SEC lawsuit.
  • Fox Business journalist says the sale was perfectly legal.
  • Coinbase shares are currently down 35% versus their YTD high.

Shares of Coinbase Global Inc were hit hard this week after the SEC sued the crypto exchange. But the sell-off was relatively less damaging to CEO Brian Armstrong.

Did CEO Armstrong do anything illegal?

Reportedly, the Chief Executive sold 29,730 shares of the company in total only a day ahead of the SEC’s complaint prompting many to question if it had anything to do with insider trading.

According to Eleanor Terret – a Fox Business journalist, though, it was a perfectly legal sale as it was planned even before Coinbase was served a “Wells Notice”. Her recent tweet reads:

According to the SEC filings database, this was part of a pre-planned stock sale initiated in August 2022 that was intended to comply with Rule 10b5-1(c).

The SEC lawsuit resulted in an increase in Ethereum withdrawals at Coinbase this week (read more).

Some in crypto community are still not happy

Terret’s explanation, though, was not sufficient to satisfy everyone in the crypto community.

Some of them continue to see offloading shares at least as a lack of loyalty or a lack of confidence on CEO Armstrong’s part. David Orr – a Twitter user, for instance, wrote on the social platform:

It’s a fairly easy process to cancel/terminate a 10b5 plan. The optics here are terrible given his PR campaign to label himself and Coinbase as saviors of crypto.

Nonetheless, it remains to be known if such comments will make Coinbase CEO adjust the schedule of his future share sales. Versus their year-to-date high, Coinbase shares are currently down about 35%.

The post Coinbase CEO sold big chunk of company shares a day ahead of SEC complaint appeared first on CoinJournal.

Coinbase (and crypto’s) fate hangs by a string: A Deep Dive

Key Takeaways

  • Coinbase is down 86% from its $100 billion IPO valuation 
  • It has significantly underperformed Bitcoin, Ethereum, the Nasdaq and almost every benchmark since
  • This week it was sued by the SEC for violating securities law, its stock down another 27% from last week
  • Coinbase went public under the SEC’s watch in April 2021, and the exchange sued the regulator two months ago for not responding to pleas for regulatory clarity 
  • Our Head of Research, Dan Ashmore, analyses the stock’s performance to date and writes about why the fate of the entire company is at stake
  • The court case represents a huge day for crypto, Ashmore writes, and a much more intriguing case than the lawsuit Binance was charged with this week

Coinbase, the world’s largest publicly traded crypto company, closed last week trading at a price of $64.55. Then, the SEC came knocking. 

The financial regulator sued Coinbase Tuesday, alleging it failed to register as a broker, national securities exchange or clearing agency, and is hence violating US securities law. Shares opened the next morning at $47.10, a tumble of 27% compared to that closing price the prior Friday (they had fallen 7.5% on Monday after Binance was sued). 

Following a slight rebound, as of Thursday morning, Coinbase is trading at $53.26, its market cap $12.5 billion. That represents a painful 86% decline from its IPO in April 2021, when the company floated at a valuation of nearly $100 billion, or $381 per share. Ouch.

In a lot of ways, the demise of Coinbase sums up the entire cryptocurrency industry over this period. Since the top in November 2021, the space has been absolutely ravaged. A transition to tight monetary policy from central banks around the world, in response to rampant inflation, has pulled the rug out from under the industry (to use the crypto-native expression).

Despite allures of grandeur from certain investors during the pandemic (possibly dizzy from the explosive gains realised across the board as the Robinhood and cryptocurrency boom raged), Bitcoin and every other cryptocurrency trade like a high risk assets (at least for now). 

Bitcoin may present as an intriguing discussion with regard to whether it ever can decouple, or take that crown of an inflation hedge. However, the reality is that as of 2023, everything in the cryptocurrency space is highly correlated and on the long end of the risk spectrum. 

I compiled a deep dive on this point in March, when there were calls that Bitcoin was decoupling as banks were going under. All kinds of fancy correlation graphs were used, but sometimes there is no need to complicate things – look at this chart of Bitcoin vs Nasdaq over the last two years, which should show you all you need to know (please excuse the axis crime):

Coinbase’s stock was always going to fall if/when the crypto space pulled back – that is not rocket science as the lockstep relationship could be seen on the way up too. And as crypto took blow after blow, from Terra to Celsius to FTX and so on, prices collapsed and the wave of enthusiasm for these new digital assets turned into a trickle. For Coinbase, a company reliant on that enthusiasm, aka trading volume, for revenue, that amounted to a problem. And down the share price went.

In June 2022, Coinbase laid off 18% of its workforce. Six months later, it announced another round of layoffs, an additional 20% of the company chopped. 

However, Coinbase’s fall signifies more than just the scandals of 2022, or the price collapses and risk mismanagement across the industry. It also highlights the travails of being a crypto company in the US today, and the increasingly regulatory hostile environment it is facing. 

The precedent to the SEC lawsuit this week came in March, when the SEC issued a Wells notice (which typically signals legal action is imminent), after which the stock fell 25%. The company has repeatedly called for regulatory clarity, openly pleading with the SEC to provide clear guidance and clear up, among other things, where exactly cryptocurrencies tie in with current securities laws. 

The next month, Coinbase went on the counter-offensive, suing the SEC and requesting the regulator be forced to answer a petition from July 2022 asking whether existing securities law could be extended to the cryptocurrency industry. 

“Today, we filed a narrow action in the U.S. Circuit Court to compel the SEC to respond ‘yes or no’ to a rulemaking petition we filed with them last July asking them to provide regulatory guidance for the crypto industry”, wrote Paul Grewal, Coinbase’s chief legal officer, on Twitter. 

Indeed, this is what makes the SEC’s case against Coinbase so captivating. I wrote earlier this week about how I believed Binance, which was sued by the SEC Monday, 24 hours prior to Coinbase, brought their regulatory troubles upon themselves. Binance is an exchange that operates in an incredibly opaque manner, such as refusing to provide information on its liabilities and operating without a physical headquarters, that is always going to draw the ire of regulators. Like it or not, that is the reality of the law in the US, and the SEC suing Binance should therefore have been widely expected both by the exchange itself and wider stakeholders in the industry (indeed, there are a multitude of cases and investigations ongoing against Binance’s various entities and executives). 

However, for Coinbase, it is different. This is an exchange that floated on the Nasdaq in April 2021, under the SEC’s watch. It strived to comply with regulators, publicly challenging them to open communication lines and provide clarity. If the SEC are now accusing them of being an unregulated securities exchange, why were they allowed to float two years ago? Has something changed in the last two years that now renders Coinbase in violation of the law, where they were fully legal before?

I’m no lawyer – far from it, and these are genuine questions. I really don’t know, and that is why it presents as such a fascinating case, in contrast to the Binance one which seems like a typical regulatory complaint. Obviously, since FTX collapsed in November the regulatory regime has shifted, and that is not a surprise. I’ve said it before and I’ll say it again: the bulk of the cryptocurrency industry is a quagmire of insider trading, fraud and get-rich-quick-schemes. FTX elevated the prominence of this in the eyes of regulators, and the industry jumped to the top of the queue. Yet despite this, I still believe those aforementioned questions are valid – and that is what makes this impending court case riveting to me.   

But make no mistake, whatever your beliefs about whether this is “right” or “wrong”, this is an existential threat to Coinbase as a business. One could go even further and speculate about the implications of what a loss in the courts for Coinbase would mean for the crypto industry as a whole in the US. Sure, crypto will live on, but how will centralised companies operate in the space thereafter? Why wouldn’t this notoriously location-agnostic industry just move overseas? And while that is possible, the loss of the world’s biggest financial economy to the crypto ecosystem – and the blockade on institutional cash that would therefore imply – would be a devastating blow. What Wall Street asset managers would care about crypto then? What companies would whack it on their balance sheet? Where…would it go?

These are challenging times for Coinbase investors. This is a company now valued at a measly $12.5 billion, the bubble of hysteria well and truly popped from those halcyon days when jpeg images were trading for hundreds of thousands of dollars, Tesla was purchasing bags of Bitcoin and trad-fi managers were frantically answering calls to start allocating to this nascent, dynamic and up-only asset class. 

The below chart is telling when it comes to Coinbase specifically. It shows its 86% drawdown since its IPO in April 2021 against a variety of benchmarks, and it has underperformed every single one of them. 

Bitcoin is down 59% since Coinbase went public. Ethereum has shed 20% (it more than doubled between April and November 2021). The tech-heavy Nasdaq is off 6%, while the S&P 500 has realised a slight gain at 3%. Even the quasi-Bitcoin holding vehicle that is Michael Saylor’s MicroStrategy has “only” peeled back 67%.

It’s not hyperbole to say that Coinbase investors from the early days of the company’s float could have chosen nearly any other asset and been better off (well, nearly all. Tokens such as LUNA and FTT existed). 

Going forward, the picture has never been murkier. The macro climate is uncertain. While we may be coming to the end of the tightening cycle, rates have gone from near zero to north of 5% at a rapid pace, and monetary policy notoriously operates with a lag. There may still be pain to come – employment is still relatively tight and if the Fed is adamant to stick to that 2% inflation target, it won’t be an easy ride to get there. 

And then, the regulatory picture worsens by the day. Coinbase will have their day in court, and it will be a big one. Not only for the stock, but for crypto at large. This is an industry that has seen its reputation dragged through the mud over the last year, with scandal after scandal and a total wipeout of prices, volume and wider interest in the space. It has never needed a win so bad.

Those holding onto those Coinbase shares are betting that win will come, but the challenges are multiple and the road ahead is steep. And that goes for the whole industry, not just Coinbase. 

The post Coinbase (and crypto’s) fate hangs by a string: A Deep Dive appeared first on CoinJournal.

On-chain report: Where are funds moving after SEC sues Coinbase? Ether outpacing Bitcoin withdrawals

Key Takeaways

  • The SEC sued Binance on Monday and Coinbase on Tuesday
  • 5% of Coinbase’s Ethereum balance was withdrawn Tuesday, with around 3% of Binance’s reserves withdrawn
  • Overall, the movements are not significant compared to previous episodes or average daily outflows
  • Bitcoin saw even less withdrawals, negligible amounts withdrawn from each exchange
  • Coinbase’s lawsuit presents as the more intriguing of the two, with the exchange floating on the Nasdaq stock exchange in 2021 and overtly striving for clear regulation

The great regulatory clampdown of 2023 stepped up a notch this week, as the SEC filed lawsuits against the two biggest exchanges on the planet. Binance was sued Monday, and Coinbase got the same treatment less than 24 hours later. 

In this piece, we look on-chain to see what the money is saying, as the crypto space digests the news. 

Bitcoin withdrawals relatively steady

On Binance, the Bitcoin balance has dropped from 704,000 on Sunday to 689,000 Tuesday. That represents an outflow of around 15,000 Bitcoin – totally insignificant compared to both the total balance and the normal balance flow we see over any given 48 hour period.  

Coinbase were sued a day later (Tuesday compared to Monday), so we have less of a period to work with. But there has been nothing unusual here either, an outflow of 550 Bitcoin on Tuesday a negligible flow of around 0.1% of the total balance.  

Hence, there really is nothing to see with regards to Bitcoin’s on-chain movements, at least as of Wednesday morning when I am compiling this. Bitcoin’s price has also rebounded well, trading at $26,800. Prior to the lawsuits, it traded at $27,000. It was trading at around $25,500 for most of Monday, down 5.5%, before bouncing back. 

Ethereum withdrawals increasing from exchanges

On the Ethereum side, things are different. Flows are not crazy, but are certainly notable. Tuesday saw nearly 5% of Coinbase’s ETH withdrawn, with Binance releasing around 3%. 

This is likely related to the nature of the lawsuits themselves, a key crux of which alleges a violation of securities law. The SEC listed an laundry list of tokens as securities, however Ethereum was a notable omission. Nonetheless, SEC chair Gary Gensler has refused to comment on whether ETH does or does not constitute a security, and there has been much speculation (and fear) in the crypto market about where Ethereum fits in. 

Additionally, the SEC outlined Coinbase’s staking programme, which includes Ethereum, as being in breach of regulations: “Today we charged Coinbase, Inc. with…failing to register the offer and sale of its crypto asset staking-as-a-service program”. 

This could be one reason for the heightened withdrawals of Ether compared to Bitcoin. The latter is viewed as the closest to a commodity, at least in the eyes of the law. Intuitively, it makes sense, too – Bitcoin pays no yield, no dividend and has a predetermined supply. Ether flipped to proof-of-stake in September and sits in a grey area of the law, not really fitting in cleanly to any predetermined category. 

While many are adamant it is not a security – and thus far at least, the SEC seems to agree – this battle for crypto’s future does seem to be focused more on altcoins rather than Bitcoin. Not only that, but Bitcoin is generally less volatile than other coins, including Ether. The lower movement is not overly surprising in this context. 

Finally, while Ether has seen more withdrawals than Bitcoin, these are not overly notable. They are nowhere near the same scale as past incidents, such as the flow of coins out of exchanges after FTX collapsed in November, or other crises last year such as Terra or Celsius’ meltdowns. 

What next for crypto?

As for what happens next, that is a lot less black and white than simply observing how many coins have moved on the blockchain. I wrote yesterday morning about how inevitable the Binance lawsuit, and what a challenging development it represented for the entire space. 

This was hours before the Coinbase lawsuit was revealed. As I said yesterday, I believe the Binance lawsuit was brought upon themselves in a lot of ways, with regard to their opaque business model, refusal to be transparent, and convoluted corporate structure. Not only that, but multiple investigations were ongoing, and stories of related trading entities and circumventing money laundering laws were never going to end well. 

In my view, the Coinbase case represents much more of a threshold moment for crypto. This is an exchange that strived to be compliant and played by the rules, at least overtly. Binance, in the words of its own chief compliance officer, never wanted to be regulated. But Coinbase floated on the stock exchange in 2021 – a move which the SEC allowed, evidently. Now it is being sued for being an unregistered securities exchange. I’m no lawyer, but it sounds like a captivating case, and one which will inevitably have massive implications for the entire space. 

Binance, on the other hand, is less intriguing for me. They have openly played fast and loose, and their lax restrictions for US customers were well known. They still claim to have no physical headquarters, and operate unconventionally in every sense of the word. When it comes to lawmakers, that is rarely a good thing. 

Either way, the past couple of days have been very concerning for crypto as a whole. It feels like the roof is caving in and the party is being shut down. Whatever your views on whether this is a good or a bad thing, I’m not overly surprised. This is the reality, and the relatively muted price and withdrawal action shows that the market is not overly shocked either. 

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Cathie Wood boosts stake in Coinbase stock despite SEC lawsuit

  • The U.S. SEC sued Coinbase Global for violating securities laws this week.
  • Wood bought $21 million worth of Coinbase stock on consequent sell-off.
  • Coinbase stock is currently up nearly 60% versus the start of the year.

Cathie Wood remains bullish as ever on Coinbase Global Inc even though it has again come in the crosshairs of the U.S. Securities and Exchange Commission.

Wood spends $21 million on Coinbase stock

On Tuesday, the SEC sued Coinbase for violating securities laws that resulted in an over 10% hit to its stock price – a sell-off that Wood saw as an opportunity to load up on 419,324 shares of the crypto exchange.

The Founder and CEO of Ark Invest spent about $21 million in total on the said purchase that was spit between three of her exchange-traded funds – Ark Innovation, Ark Next Generation Internet, and Ark Fintech Innovation.

It is noteworthy here that Wood expects Bitcoin to hit $1.3 million by the end of this decade. To that end, she’s been adding to her position in Coinbase stock this year. It is now her sixth biggest holding.

Coinbase Global’s response to the SEC

The lawsuit against Coinbase doesn’t come as much of a surprise considering it was served a “Wells Notice” earlier this year. Responding to the SEC complaint, the crypto company said:

Remember, SEC reviewed our business and allowed us to become a public company in 2021 and there’s no path to come in and register – we tried, repeatedly, so we don’t list securities.

Who also remains bullish on Coinbase stock despite the SEC’s aggressive move is HCW analyst Mike Colonnese.

He maintained his “buy” rating on the crypto exchange this morning and said its shares could climb all the way up to $77 – a rather lucrative 45% return from here.

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Gary Gensler on crypto regulations: ‘there’s been clarity for years’

  • SEC sued Coinbase for violating U.S. securities laws today.
  • Chair Gary Gensler discussed on CNBC’s “Squawk on the Street”.
  • Coinbase stock opened nearly 20% down on Tuesday.

Coinbase Global Inc opened nearly 20% down on Tuesday after the SEC sued the crypto exchange for violating the U.S. securities laws.

Gensler discussed the lawsuit on CNBC

Crypto companies including Coinbase have been demanding more clarity from the U.S. regulator for the longest time.

Interestingly, though, Gary Gensler – Chair of the Securities and Exchange Commission denied today that there’s been a lack of clarity in the first place.

There’s been clarity for years. The investing public has benefit of securities laws. Crypto shouldn’t be different. These platforms need to come into compliance and protect investing public.

Coinbase is still up roughly 45% for the year. A day earlier, the U.S. SEC had filed a similar complaint against Binance and its CEO Changpeng Zhao as well.

Gensler says USD is already a digital currency

On CNBC’s “Squawk on the Street”, Chair Gensler also contested the need for more digital currencies especially since about 16,000 of them are already tradable via Coinbase.

We already have digital currency, the U.S. dollar, the Euro, the Yen. They’re all digital. We have digital investments. So, what’s the real underlying value of these tokens?

He also confirmed that going after Coinbase and Binance wasn’t an abrupt decision. The regulator has had discussions with these companies that have a business model based entirely on non-compliance with the securities laws, Gensler added.

Remember that the SEC has so far failed to prove that XRP is a security in a lawsuit it filed way back in December 2020.

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Kraken probing funding Gateways amid deposit and withdrawal delays

  • Kraken recently suffered operational delays due to technical issues with crypto funding gateways.
  • The exchange was however able to quickly resolve the problem although the exact cause hasn’t been disclosed.
  • The delays caused panic since they came at a time when crypto exchanges in the US are under scrutiny by the SEC.

Kraken crypto exchange recently suffered a technical glitch that impacted several crypto funding gateways. Among the affected crypto funding, channels included Bitcoin (BTC), Ethereum (ETH), and ERC-20 tokens.

Users from various places complained of deposit and withdrawal delays drawing attention to the delicate infrastructure supporting the transactions.

Swift response by Kraken

After customers raised the issue, Kraken earlier today (7:15 am UTC) announced on its status page that deposits and withdrawals were facing challenges. The crypto exchange then immediately embarked on rectifying the issues and by 8:55 am UTC, the delays were resolved according to an update given by the exchange on their status page.

At around 10:30 am UTC, Kraken’s futures trading platform was temporarily suspended for about 10 minutes for scheduled maintenance, which was separate from the earlier delay issues.

Kraken is one of the oldest cryptocurrency exchanges and it supports more than 200 cryptocurrencies and six fiat currencies.

Uncertainty caused by SEC’s legal action against crypto exchanges

Against the backdrop of the brief technical glitch, Kraken and other cryptocurrency exchanges are coping with the uncertainty caused by SEC’s legal action against Binance and Coinbase. The US SEC first sued Binance before later announcing that it had also sued Coinbase today.

Arcra’s Chief Investment Officer pointed out that the measures taken by the SEC against Binance indirectly impact tokens listed on Coinbase, Kraken, and other crypto exchanges with a presence in the US.

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The SEC strikes again: First Binance, now Coinbase

Key takeaways

  • The US SEC has sued crypto exchange Coinbase for acting as an unregistered broker.

  • This latest development comes a few hours after the regulatory agency sued Binance.

SEC sues Coinbase for acting as an unregistered broker

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, one of the leading crypto exchanges in the world.

This latest cryptocurrency news comes barely 24 hours after the SEC slapped a lawsuit against rival exchange Binance. 

SEC filed the lawsuit a few minutes ago, alleging that Coinbase has never registered as a broker, national securities exchange or clearing agency. Thus, the SEC claims that Coinbase has been evading the disclosure scheme for securities markets. 

The regulatory agency alleged that several tokens offered by the crypto exchange are securities. SEC filed the lawsuit in a New York Federal court.

Coinbase is yet to respond to the lawsuit. This latest development comes as the SEC and Coinbase have been battling a legal case over the past few months.

Earlier this year, the SEC issued Coinbase a Wells Notice, indicating that it is looking into the affairs of the cryptocurrency exchange. 

The crypto exchange now filed a lawsuit against the SEC in April, asking the securities regulator to provide a yes or no to its request for the commission to draft and approve a digital asset-specific rule.

US SEC is coming after exchanges

The lawsuit against Coinbase comes barely 24 hours after the SEC went after Binance, the world’s largest cryptocurrency exchange by daily trading volume. 

The SEC alleged that Binance was offering services to high-valued US customers on its platform, which is in violation of U.S. securities laws.

The regulatory agency also claimed that Binance CEO exercised control over customer assets, adding that he combined them with personal and company holdings.

The SEC has been coming after crypto exchanges in recent months, including Kraken. 

Coinbase’s stock price has dipped by more than 15% during Tuesday’s pre-market trading session following this latest development. COIN is now trading at $49.44 per share. 

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Coinbase stock has upside to $70, analyst says

  • Atlantic Equities upgraded Coinbase Global to “overweight” on Tuesday.
  • Analyst Simon Clinch explained why in a research note to clients.
  • Coinbase stock is already up more than 80% versus the start of 2023.

Coinbase Global Inc continues to be the “best expression of crypto”, says Simon Clinch – an Atlantic Equities analyst.

Coinbase stock could gain 20%

On Tuesday, Clinch upgraded the crypto exchange to “overweight”. His $70 price target suggests a close to 20% upside from here.

He’s bullish on the Coinbase stock partially because the company has topped expectations in terms of executing cost cuts. The analyst agreed that risks including regulation and recession remain on the table but said in his research note:

These actions are building resilience in the business model . . . Coinbase’s recent actions allow investors to look through toward the longer-term opportunity.

Year-to-date, the Nasdaq-listed firm is already up more than 80% at writing.

Coinbase had a strong first quarter

Coinbase has recently launched a Bermuda-based exchange that, at least for now, is limited to non-U.S. institutional users interested in Bitcoin and Ethereum perpetual futures.

Earlier in May, the crypto exchange also reported its financial results for the first quarter that handily topped estimates as Coinbase Prime noted record volumes. According to Atlantic Equities’ Clinch:

Coinbase is regaining custody asset share and is also leveraging its trust credentials to exercise pricing power – both important steps towards building resilience in the model.

Those interested in buying Coinbase stock today should remember, though, that this crypto firm received a “Wells Notice” from the U.S. Securities and Exchange Commission (SEC) in March.

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Coinbase’s zero-fee subscription service out of beta and expanded outside the US

  • Coinbase has rolled out a new subscription service called Coinbase One.
  • The service will give members access to $0 trading fees among other benefits.
  • The Coinbase One is expected to roll out across 35 countries in the near future.

After staying in Beta since 2021, Coinbase has officially opened its zero-fee subscription service called Coinbase One. The service has also been expanded outside the US into countries like the United Kingdom, Germany, and Ireland.

Through Coinbase One, customers will have the option of paying $29.99 per month to enjoy zero trading fees and higher staking rewards. Customers can pay for the subscription using their linked bank account (ACH) or linked debit card.

Zero trading fees on Coinbase

According to the statement issued by Coinbase, the Coinbase One service allows customers to access $0 trading fees, dedicated 24/7 phone support, $1M Account Protection, and pre-filled Form 8949 in Coinbase Taxes.

The statement by Coinbase in part reads:

“Eligible users may sign up for Coinbase One which is an automatically renewing subscription requiring recurring payments. A Coinbase One subscription grants you the benefits of: (a) a waiver of Coinbase fees for buying, selling, and converting digital currencies on the Coinbase platform (which does not include Coinbase Pro’s order matching platform), provided that a spread in the price is still included in all buys, sells, and conversion of digital currencies on the Coinbase trading platform (learn more about fees here); (b) a dedicated customer support line available twenty-four (24) hours a day, seven (7) days a week, three-hundred and sixty-five (365) days a year; and (c) Coinbase Account Protection. Coinbase may modify or suspend this program at any time upon notice.”

However, the fee-free trading volume limit as found in customers’ account settings will apply. When customers trade over their set trading volume limit, they will be responsible for paying regular trading fees.

Widening international reach

Coinbase aims to expand the Coinbase One service in 35 countries in the future as Coinbase tries to widen its international reach.

The move also comes just a month after Coinbase unveiled a global crypto exchange following the tightening regulatory environment.

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Coinbase temporarily pauses ETH staking reward payouts

  • Coinbase yesterday evening announced it was suspending ETH staking reward payouts.
  • The crypto exchange has been having some issues with ETH staking recently.
  • The exchange, however, expects to resolve the issue within 48 to 72 hours.

In a statement issued on the exchange’s website on May 16, Coinbase announced that it was temporarily pausing issuing Ethereum (ETH) staking reward payouts.

The exchange is currently investigating the issue following the temporary halt.

ETH rewards stuck

There was an issue on Coinbase with ETH rewards Last week. ETH rewards became stuck because of the lack of support for ETH addresses from external validators in its systems. 

The hiccup made the crypto community frustrated with a majority venting their anger on social media platforms.

Besides issues with ETH staking rewards, a significant number of withdrawals were also stuck in the withdrawal queue.

While the recent Ethereum Shapella upgrade had a number of positive implications for ETH holders, the ability to withdraw staked ETH seems to be putting pressure on most ETH-staking platforms.

Coinbase has recently received over 53,400 ETH deposits with a significant portion of these deposits coming from Coinbase’s cbETH deposit address. The address witnessed a withdrawal of 44,000 ETH, which was transferred to the Coinbase 10 wallet address, according to CryptoQuant data.

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