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Indian Crypto Exchange Coindcx Going Global With Bitoasis Acquisition

Indian Crypto Exchange Coindcx Going Global With Bitoasis AcquisitionIndian crypto exchange Coindcx is expanding globally by acquiring the Middle Eastern digital asset platform Bitoasis. This strategic move enhances Coindcx’s presence in the Middle East and North Africa (MENA) region while allowing Bitoasis to retain its branding and leadership, signaling a new phase of growth and maturity for both companies. Big Milestone: 2 Market […]

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US Accounting Watchdog Issues Warning on Crypto Proof-of-Reserve Audits: Investors Urged to Exercise Caution

US Accounting Watchdog Issues Warning on Crypto Proof-of-Reserve Audits: Investors Urged to Exercise CautionAccording to a recent warning by the U.S. Public Company Accounting Oversight Board (PCAOB), crypto proof-of-reserve (POR) audits have limitations, and the board believes that investors should exercise caution when dealing with companies using POR audits. PCAOB Calls for Investor Caution and Due Diligence When Using Proof-of-Reserve Reports The U.S. accounting watchdog recently issued an […]

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Uzbekistan Collects Over $300,000 From Crypto Sector

Uzbekistan Collects Over 0,000 From Crypto SectorWhile operations with digital assets are not taxed in Uzbekistan, the government is receiving a growing amount of revenues from the industry. The increase in budget receipts has been attributed to the licensing regime and the introduction of fees for crypto companies. Crypto Exchange in Uzbekistan Pays Over $10,000 a Month to the State Coffer […]

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Coinbase cut costs and bolstered rep, but profits remain challenged: Analysts

Analysts from Moody’s and JPMorgan hailed the exchange for its strong reputation but said it wouldn't be enough to solve its profitability woes.

Cryptocurrency exchange Coinbase won’t escape from the profitability challenges it will face from the crypto market downturn, despite having a strong brand and credibility in the crypto market, according to investment analysts.

Credit rating firm Moody’s released a note on Coinbase on Jan. 19 discussing its downgrade of Coinbase’s senior debt and corporate family rating (CFR) — a rating assigned to reflect the opinion of a company’s ability to honor its financial obligations.

Coinbase’s CFR and senior debt were re-graded to B2 and B1 from Ba3 and Ba2 respectively, indicating the firm is “non-investment grade” and “speculative and subject to high credit risk” according to Moody’s.

The firm noted that Coinbase is suffering from “substantially weakened revenue and cash flow generation” due to “challenging conditions,” specifically depressed crypto prices and lower trading activity.

The market conditions saw Coinbase lay off 20% of its employees, around 950 people, on Jan. 10, its second wave of recent major layoffs following its June 2022 18% headcount slash in a bid to cut cos

Coinbase CEO Brian Armstrong at a conference in 2018. In the most recent round of layoffs, he said the firm needed “the appropriate operational efficiency to weather downturns in the crypto market.” Image: Flickr

However, despite Coinbase’s bid to preserve liquidity, Moody’s still expected “the company’s profitability to remain challenged.”

The bankruptcy of its crypto exchange peer, FTX, is a cause for heightened concern and uncertainty regarding crypto regulation according to Moody’s.

It said a sudden move by regulators in the crypto industry could negatively impact Coinbase’s revenue through increased costs of regulatory compliance.

Moody’s added, however, that increased oversight “could ultimately favor the relatively more mature and compliant crypto-asset platforms such as Coinbase.”

Meanwhile, a separate note from analysts at JPMorgan argued that Coinbase’s credibility and reputation in the industry have strengthened after recent collapses.

“While the crypto-ecosystem has suffered further meaningful credibility issues, Coinbase has emerged with its credibility and brand strengthened — at least relatively."

The financial firm's analysts which maintained a rating of “neutral” for Coinbase in its latest note said Coinbase could even be a “beneficiary of the challenges” other exchanges have faced in the wake of FTX.

The upcoming Shanghai hard fork for the Ethereum blockchain could also be a positive for the exchange according to JPMorgan’s analysts.

Related: Coinbase stops Japan operations amid trading slump

The upgrade “could usher in a new era of staking for Coinbase” with analysts estimating 95% of retail investors on the platform may stake Ethereum post-upgrade, netting Coinbase up to nearly $600 million a year.

On Jan. 6 the Coinbase share price hit an all-time low of $31.95 after over a year of constant price declines according to Yahoo Finance data. The day prior, veteran investor and ARK Invest CEO, Cathie Wood, loaded up on $5.7 million worth of Coinbase shares.

Since then the share price of Coinbase and other crypto-related companies have surged.

Coinbase gained 72.6% since the Jan. 6 low and traded at over $55 at the close of market on Jan. 20, where it saw an 11.6% gain on the day.

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Nexo Agrees to Pay $45 Million to SEC and State Regulators for Unregistered Offering of Earn Interest Product

Nexo Agrees to Pay  Million to SEC and State Regulators for Unregistered Offering of Earn Interest ProductThe cryptocurrency lender, Nexo, has agreed to pay $45 million to the U.S. Securities and Exchange Commission (SEC) and several state regulators after charges were levied against the firm for failing to register the company’s Earn Interest Product (EIP). Nexo detailed that the settlements are on a “no admit, no deny” basis and that the […]

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Digital Currency Group Suspends Dividends Amid Regulatory Trouble With Subsidiary Genesis

Digital Currency Group Suspends Dividends Amid Regulatory Trouble With Subsidiary GenesisAccording to a shareholders’ letter from Digital Currency Group (DCG) viewed by finance and crypto publication Coindesk, the company has suspended dividends until further notice. This news follows the U.S. Securities and Exchange Commission (SEC) charging a subsidiary firm of DCG, Genesis Global Capital, with operating an “unregistered offer and sale of securities to retail […]

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Bank of France Governor Calls for Mandatory Licensing for Crypto Companies

Bank of France Governor Calls for Mandatory Licensing for Crypto CompaniesFrance has to adopt a licensing regime for crypto service providers, the head of the country’s central bank has suggested. According to the executive, the need to tighten regulatory oversight stems from the “disorder” in the industry throughout the past year. Licensing Should Replace Registration for Crypto Firms in France, Governor Galhau Says Banque de […]

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Coinbase Agrees to $100 Million Settlement With New York Financial Regulator for Anti-Money Laundering Violations

Coinbase Agrees to 0 Million Settlement With New York Financial Regulator for Anti-Money Laundering ViolationsCoinbase has agreed to pay a $100 million settlement with the New York Department of Financial Services (NYDFS), according to a consent order signed by the NYDFS superintendent Adrienne Harris on Jan. 4, 2023. New York’s financial regulator said compliance problems were detected and the exchange’s anti-money laundering controls were inadequate from 2020 through 2021. […]

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Accounting Firm Mazars Stops Proof-of-Reserve Audits for Crypto Firms, Binance Audit Removed From the Web

Accounting Firm Mazars Stops Proof-of-Reserve Audits for Crypto Firms, Binance Audit Removed From the WebThe accounting firm Mazars Group has stopped doing proof-of-reserves (POR) audits for cryptocurrency exchanges and the recently published Binance POR has been removed from the web. Mazars was conducting a number of POR audits for crypto exchanges like Binance, Crypto.com, and Kucoin following the FTX collapse last month. Mazars Group Pauses Crypto Company Audits, Binance […]

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Blackrock CEO on FTX Collapse: Most Crypto Companies Aren’t Going to Be Around

Blackrock CEO on FTX Collapse: Most Crypto Companies Aren’t Going to Be AroundThe CEO of Blackrock, the world’s largest asset manager, says that most crypto companies will not be around following the collapse of crypto exchange FTX. However, the executive is still optimistic about blockchain technology. Blackrock’s CEO on FTX’s Collapse and Future of Crypto Larry Fink, the CEO of Blackrock Inc. (NYSE: BLK), the world’s largest […]

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