Cryptocurrency exchange Coinbase (COIN) has experienced a significant increase in the value of its shares. Reaching an 18-month peak, driven, in part, by the recent accusations faced by competitor Binance and its former CEO Changpeng Zhao. On November 27, Coinbase shares closed at $119,77. This represented the biggest increase since May 2022 and marked an increase of around 256,5% year-to-date.
This significant growth in Coinbase shares comes after Binance and Changpeng declared guilt “CZ” Zhao on charges of money laundering and U.S. sanctions violations. The agreement reached with US authorities included a fine of US$4,3 billion, Zhao's resignation as CEO and acceptance of Binance to collaborate with Department of Justice (DOJ) and U.S. Treasury compliance monitors for up to five years.
Hand up I got some of this data wrong. Just took an hour to update/double check some of this. If you're an issuer/custodian/whatever and some of the data on this list is wrong or missing — feel free to reach out
—James Seyffart (@JSeyff) November 27, 2023
On the other hand, the Binance situation appears to have positively influenced investors' perception towards Coinbase, which also recorded significant gains from the custody of Bitcoin and Ether exchange-traded funds (ETFs) in the US. According to Bloomberg ETF analyst James Seyffart, Coinbase is the custodian of 13 of the 19 spot cryptocurrency ETFs currently pending with the U.S. Securities and Exchange Commission.
Coinbase Shares Rise Amid Binance Turmoil
However, Coinbase faces its own set of regulatory challenges. The exchange is currently in a lawsuit with the Securities and Exchange Commission (SEC) from the USA. What it accuses of failing to register properly and listing tokens that allegedly violate securities laws. Coinbase, for its part, disputes the accusations and questions the SEC's authority over the cryptocurrency sector.
Despite these challenges, Coinbase's recent stock performance signals renewed optimism among investors toward the exchange. O cryptocurrency market in general it also looks revitalized. This optimism is an indication of the sector's resilience and growth potential, even in the face of a constantly evolving regulatory environment.