Moody’s Fresh Ratings For Coinbase Following SEC Charges

Coinbase Global (NASDAQ: COIN) allegations were unexpectedly announced by the US Securities and Exchange Commission (SEC), which came as a complete shock. It was anticipated that regulatory action would be taken, despite earlier indications. During pre-market trading, the stock price crashed as a result of this enforcement action against the well-known US crypto exchange. Additionally, the company's stock ratings are currently being reduced.

The stock rating and outlook for COIN shares were updated by renowned credit rating and research company Moody's. According to the SEC charge against Coinbase, which was noted in the agency's statement on June 8th, the rating and outlook were changed.
From Moody's, Coinbase's senior unsecured notes were rated B1 guaranteed and B2 corporate family. In addition, the outlook for the company was changed from stable to negative.

According to the rating agency's statement, the US government has charged the cryptocurrency exchange with acting as a "unregistered securities broker, national securities exchange, and clearing agency." The cryptocurrency company also received a fine for failing to register its crypto staking-as-a-service programme for offer and sale.

However, the agency's remarks clarify the situation and give more information about the likely future of the cryptocurrency company. The agency stated that Coinbase's excellent liquidity position and recent improvements in cash flow generation as a consequence of diligent spending management led to the affirmation of its ratings. It is important to note that the SEC's allegations are particular to some of the goods that Coinbase offers and do not cover its well-known trading items.

As per the agency, the company's shift from a stable outlook to a negative outlook signifies the uncertainty surrounding the potential impact of the regulatory charges on the business model and cash flows, highlighting the effectiveness of the financial regulator in this regard.
The rating agency is nonetheless upbeat about Coinbase despite the rating and outlook drop. It highlighted the cryptocurrency company's strong liquidity, with 5 billion USD in cash and cash equivalents. Furthermore, Coinbase owes 3.4 billion USD in long-term debt.
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