Shares of Coinbase (COIN) surged to an 18-month high following the acknowledgment of money laundering and sanctions violations by rival exchange Binance and its former CEO Changpeng Zhao in the United States. On November 27, Coinbase closed at $119.77, marking its highest level since May 5, 2022, when it closed at $114.25, as reported by TradingView. Little change was observed in after-hours trading. Despite this surge, Coinbase shares remain 65% below their all-time high of nearly $343 recorded on November 12, 2021. Year-to-date, Coinbase shares have risen approximately 256.5%.
The surge in Coinbase's share price occurred shortly after Binance and Changpeng Zhao admitted to money laundering, violating U.S. sanctions, and operating an unlicensed money transfer business. In response, Zhao agreed to step down as CEO, and Binance reached a $4.3 billion settlement with the U.S. This settlement also involves Binance being subject to compliance oversight by the Justice Department and Treasury Department for the next five years.
Coinbase has benefited significantly from the pending approval of US spot Bitcoin and Ethereum Exchange Traded Funds (ETFs). According to Bloomberg ETF analyst James Seyffart's analysis, Coinbase serves as the custodian for 13 out of 19 spot crypto ETFs awaiting review by the SEC. However, Coinbase faces legal action from the SEC, which alleges the exchange failed to register with the regulator and listed tokens that violated U.S. securities laws. Despite Coinbase's attempts to dismiss the lawsuit and challenge the SEC's authority over cryptocurrencies, the legal matter remains unresolved.
