Why Coinbase Stock Plunged Again Today
Shares of cryptocurrency exchange Coinbase Global (NASDAQ: COIN) plunged on Tuesday, which has become a regular occurrence for the stock considering it's now down more than 80% from its high. However, whereas many previous drops are attributable to volatility in the cryptocurrency space, today's drop is due to something that's potentially far more serious. As of 10:30 a.m. ET, Coinbase stock was down 15%.
According to a Bloomberg report last night, the Securities and Exchange Commission (SEC) is investigating Coinbase. At the heart of the investigation is a debate on what qualifies as a security and what qualifies as a digital asset. Coinbase is allowed to list and facilitate transactions of digital assets, not securities.
This reported investigation comes days after the SEC formally charged a former Coinbase employee with insider trading. These charges have ignited some controversy considering the SEC said, "a number of the crypto assets at issue were securities." To this, Coinbase's chief legal officer wrote a blog post entitled, "Coinbase does not list securities. End of story."
Source Fool.com
