Why Is Coinbase (COIN) Stock Down 16% Today?

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  • Coinbase (COIN) stock is dropping as the Securities and Exchange Commission (SEC) is suing it.
  • The agency claims it’s acting as an unregistered exchange and broker.
  • This has heavy trading sending COIN shares lower today.
COIN Stock - Why Is Coinbase (COIN) Stock Down 16% Today?

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Coinbase (NASDAQ:COIN) stock is falling on Tuesday following news that the Securities and Exchange Commission (SEC) is suing the crypto exchange for allegedly acting as an unregistered exchange and broker.

According to the lawsuit from the SEC, Coinbase has been “unlawfully facilitating the buying and selling of crypto asset securities” since at least 2019. The SEC alleges that this has allowed the crypto exchange to unlawfully make billions of dollars.

The main complaint from the SEC comes from Coinbase’s staking-as-a-service program. This allows investors to earn profits from proof-of-stake mechanisms. The SEC says this acts as an exchange, broker-dealer, and clearinghouse, functions not registered with the regulator.

Gurbir Grewal, Director of the SEC’s Division of Enforcement, said the following in a news release:

“As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them. While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled. Today’s action seeks to hold Coinbase accountable for its choices.”

How This Is Affecting COIN Stock Today

With the news of the SEC lawsuit, shares of COIN stock are seeing heavy trading on Tuesday. As of this writing, more than 22 million shares of the stock have changed hands. For the record, the company’s daily average trading volume is closer to 16 million shares.

COIN stock is down 16% Tuesday morning alongside the SEC lawsuit news. However, its shares are still up 47.3% year-to-date.

Investors looking for more of the most recent stock market news will want to keep reading!

InvestorPlace is offering up all of the latest stock market news traders need to know about on Tuesday! Among that is what’s moving shares of Zura Bio (NASDAQ:ZURA), GitLab (NASDAQ:GTLB), and HTG Molecular Diagnostics (NASDAQ:HTGM) stock today. All of that news is ready to go below!

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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