Coinbase Sees Surge in November as Crypto Exchange Founders Face Prison Sentence


Brian Armstrong, the CEO of Coinbase, has recently slammed the U.S. Securities and Exchange Commission. He also said that the cryptocurrency exchange is planning to invest more money outside the U.S.

Coinbase shares have jumped more than 60% this month, the second-best performance since the cryptocurrency market went public in 2020. This rally was likely caused by crises at major competitors and the rebound in the stock market, particularly for those stocks tied to the artificial-intelligence boom and cryptocurrency.

In a single month, two of the most prominent figures in the crypto-industry were sent to jail. Sam Bankman-Fried, the former founder of FTX, was found guilty by a jury of seven criminal charges of fraud related to the collapse and theft of funds from customers of FTX. His conviction has landed him a life-long prison sentence, expected to be handed down in March. Zhao Changpeng, the founder and chief executive of Binance, plead guilty for violations of the Bank Secrecy Act for failing to implement a comprehensive anti-money laundering system and for violating U.S. sanctions.

Binance, the largest crypto exchange in the world with assets of over $65 billion, has seen its market share drop from 60% to just over 40% since February. After the Justice Department announced a settlement worth $4.3 billion, customers pulled more than $1 billion from the exchange.

Brian Armstrong, in an interview with CNBC’s Joumanna Bercetche, said the Binance settlement allows the crypto-industry to move on from a series of scandals. He also said that regulatory clarity will help bring in more investment, especially from institutions.

Both Coinbase and Binance are still facing legal battles with the U.S. Securities and Exchange Commission, and Coinbase executives have floated the idea of leaving the U.S. altogether for a jurisdiction with hard-and-fast rules on crypto.

Analysts at Needham, who recommend buying Coinbase shares, wrote a report in Nov. 21 that the company “exited the crypto ‘winter’ better positioned than in the prior up cycle.” FTX has failed to deliver on its promises and Bittrex, another crypto trading platform, has exited the market.

U.S. regulators may soon approve a U.S. spot Bitcoin exchange-traded fund, which will allow investors to purchase digital currency directly using the same mechanism that they use to purchase stock and bond ETFs. Top asset managers such as BlackRock, WisdomTree, and Invesco have already entered the

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