Coinbase (NASDAQ:COIN) Global, with a market cap of $17.7 billion according to InvestingPro data, is seeking a dismissal of the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in June 2023, as the crypto industry continues to grapple with regulatory scrutiny. The SEC has accused Coinbase of operating illegally as a securities exchange, broker, and clearing agency without registration, an allegation that the company's chief legal officer, Paul Grewal, vehemently refutes.
The SEC's lawsuit builds on precedents set by two previous cases involving Ripple Labs, Inc.'s XRP token and Terraform Labs. These cases have been central to the SEC's argument against Coinbase. The crypto industry initially perceived the Ripple case as a victory until the Terraform ruling challenged its reasoning.
Grewal dismisses the SEC's claim as "same old same old," denying that any assets on their platform fall under SEC's jurisdiction. According to Grewal, barring the Wallet application, none of Coinbase's dealings involve securities through investment contracts.
The request for dismissal was lodged with a Manhattan federal court on Friday. This development adds another layer to the ongoing tug-of-war between cryptocurrency companies and regulatory bodies, specifically around the classification and handling of digital assets.
Coinbase's stock has experienced high price volatility, and its price has fallen significantly over the last five years, as per InvestingPro Tips. This is in line with the company's P/E ratio of -13.41, indicating that it has been operating at a loss. Analysts do not anticipate the company will be profitable this year, corroborated by the fact that it was not profitable over the last 12 months. This information is crucial for potential investors to consider, as it provides insight into the company's financial health and future prospects.
The company's revenue for the last 12 months was $2.580 billion, with a gross profit of $2.190 billion, according to InvestingPro. Despite these figures, the company's revenue growth has been negative, with a -55.34% change in the last 12 months and a quarterly revenue growth of -17.46%. This could be a potential area of concern for investors, as it suggests that the company's earnings are declining.
For those interested in more detailed insights into the financial health and performance of companies like Coinbase, InvestingPro offers additional tips and real-time metrics. For more information, visit InvestingPro.
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