Coinbase faces another SEC probe over missing earnings and spelling issues for COIN stock

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coin base (NASDAQ:COIN) will be shifted several blows this week. First, the company expects the market to slow down in the second quarter and released a disappointing earnings report. Then it must grapple with a host of controversies arising from investigations by the US Securities and Exchange Commission (SEC), one of which is just about to be unveiled. So, COIN stock is clinging for life and opening up another day of decline.

It’s perhaps no surprise that a crypto exchange suffered a poor quarter during a time when the crypto industry was in disarray. When the global crypto market cap fell below $1 trillion for the first time since January 2021, investors were not keen to buy crypto.

So Tuesday’s weak results don’t come as a complete surprise. The company reports a loss of just over $1 billion for the second quarter, resulting in a loss of about $5 per share. Meanwhile, revenue fell by a whopping $1.2 billion, with the company earning $71 million less than analysts had forecast. This news leads to a bearish period for Coinbase. Some analysts are severely downgrading the stock, and price forecasters expect losses to pile up.

But that’s not all bad press for the company. Coinbase is also hampered by a number of legal controversies. Scrutiny of the crypto space is on the rise in the US, and as one of the biggest known names in the industry, Coinbase is suffering the most.

The SEC is beginning to gain traction in this area. In late July, it launched its first investigation into Coinbase, claiming the company conducted at least nine separate unregistered securities offerings. This week it is doubling down on the investigation with new allegations against Coinbase.

Coinbase faces a second ongoing SEC investigation

This SEC investigation has far-reaching implications for Coinbase. The SEC’s lawsuit against it ripple (XRP USD) claims that it only conducted an unregistered securities offering. This case has been going on for almost two years now and seems far from over. Coinbase will have to speak for far more alleged crimes. And now there’s a new investigation that’s plunging the company into the abyss.

Coinbase’s crypto staking and yield farming products are the subject of a second ongoing investigation by the SEC. In its quarterly report, investors may have been caught up in the numbers. However, the company also announced that it is being subpoenaed by the SEC for documents and other information related to staking products.

The SEC is silent on this new investigative front. Coinbase’s 10-Q does not disclose any information as to why the SEC is looking at these products. However, it is worth noting that the staking commission is an important aspect of the company’s earnings. The company earns a 25% commission on any earnings generated through its staking tools. It’s also worth noting that none of the tokens that Coinbase offers staking rewards for are any of the nine assets that the SEC has flagged as securities in its other investigation.

This pair of bearish stories would do well to keep COIN stock values ​​low today. Stocks shed 5% after trading in the green during premarket trading.

At the time of publication Brenden Rearick had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.

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