Coinbase (NASDAQ:COIN)'s legal battle with the Securities and Exchange Commission (SEC) took a significant turn on Thursday, as the SEC developed a recommendation linked to Coinbase's rulemaking appeal, a critical aspect of their mandamus action. This development was disclosed by Paul Grewal, Chief Legal Officer at Coinbase, who noted that the details of the recommendation remain undisclosed, thereby maintaining an air of uncertainty around the situation.
The rulemaking appeal was first submitted by Coinbase in April 2023, in which they demanded an immediate response from the SEC to their rulemaking petition dated back to July 2022. This appeal was part of an enforcement campaign against cryptocurrencies that Coinbase had initiated.
Grewal emphasized the necessity for a detailed response from the SEC regarding this matter. He stated that this correspondence with the Third Circuit marked a significant milestone in their ongoing legal disagreement with the SEC.
Coinbase's CEO, Brian Armstrong, concurrently expressed optimism about their legal dispute with the SEC. He stressed on the importance of clear and transparent regulations in the cryptocurrency landscape. The resolution of this dispute is anticipated to have significant implications for both Coinbase and the broader crypto market.
Adding to the complexity of the situation, InvestingPro data reveals that Coinbase has a market cap of 18.11 billion USD and a negative P/E ratio of -13.65. This data indicates that the company is not profitable, a fact that is further emphasized by the company's negative operating income of -1870.44 million USD. These figures are in line with the InvestingPro tip that analysts do not anticipate the company will be profitable this year.
Moreover, the company's revenue growth has significantly decreased by -55.34%, and the price of the company's stock has fallen significantly over the last five years, as per the InvestingPro tips. This declining trend in earnings per share and stock price movements, which are quite volatile, could be a cause for concern for potential investors.
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