Coinbase profits may suffer due to SEC actionsAccording to experts, the SEC regulator's actions on the cryptocurrency segment could have a long-term impact on giants like Coinbase. The regulator's restrictions on the Kraken betting program could have a negative impact on Coinbase's profitability. Notably, in a recent speech, SEC head Gary Gensler said that the only way for crypto businesses to survive in the U.S. is to fully comply with financial laws.
On Tuesday, Feb. 21, Coinbase representatives are expected to release the company's earnings report for the previous quarter, which ended in December 2022. It's worth noting that there was a high-profile crash of the FTX exchange at the time, which caused trading volumes to drop on many platforms, including Coinbase.
In terms of diversification, cryptocurrency exchanges are focusing on other sources of revenue, such as steaming. In turn, the SEC's actions on Kraken have set a precedent that many proprietary companies could come under pressure from the regulator.
Recall that Kraken went to an amicable agreement with the U.S. agency and the company will stop providing digital asset-stacking services. If the SEC continues to act radically in this direction, Coinbase risks losing a significant share of revenue.
