Coinbase’s stock jumped Wednesday following news that the cryptocurrency exchange had reached a $100 million settlement with the New York Department of Financial Services.
Nasdaq Composite-listed COIN was up over 12% after the announcement, trading for $37.34 per share.
America’s largest digital asset exchange today agreed to pay a $50 million fine and invest $50 million into bolstering its compliance programs after the New York regulator said it found “significant failures” in Coinbase’s compliance.
The NYDFS said Coinbase violated the New York Banking Law and state regulations regarding virtual currencies, money transmitting, transaction monitoring, and cybersecurity.
San Francisco-based Coinbase has already started to improve its practices, according to the NYDFS.
COIN’s price jump is likely down to investors now having clarity over regulatory matters related to the company. Coinbase first disclosed the NYDFS investigation as a potential risk to its business in an SEC filing in late 2021, and today’s announcement from the regulator brings this matter to a close.
The company, however, still has an SEC investigation hanging over its head. The SEC is currently examining whether the exchange allowed Americans to trade digital assets that should have been registered as securities.
Coinbase went public in April 2021, making it the first major cryptocurrency company to be listed on the U.S. stock exchange.
Back then, the crypto market was in the midst of a bull market—with Bitcoin trading for $63,000—and there was a lot of interest in investing in the digital asset sphere: COIN debuted at a price of $381, 52% higher from its $250 reference price.
But a brutal bear market which has destroyed crypto projects, companies and the price of nearly every coin and token means that COIN is now down significantly—over 90%—from when it was first listed.
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Sourced from decrypt.co.
Written by Mathew Di Salvo on 2023-01-04 17:10:26.