Change reflects uncertain impact of SEC’s charges on Coinbase’s business model, cash flows, says rating agency
Moody’s announced Thursday it changed the cryptocurrency trading platform Coinbase’s outlook to negative from stable.
The action comes after Coinbase was charged Tuesday by the Securities and Exchange Commission (SEC) with violating exchange and securities laws in the US.
“The change in outlook to negative from stable reflects the uncertain magnitude of impact the SEC’s charges will have on Coinbase’s business model and cash flows,”the rating agency said in a statement.
Moody’s, however, affirmed Coinbase’s rating, noting that the company has a healthy liquidity position, shown improvements in cash flow generation and the SEC’s charges concern only some of its products while excluding its leading traded products.
The rating agency noted that Coinbase had $5 billion in cash and equivalents as of March.
It, however, said the timing and financial consequences about the resolution of the charges remain “uncertain.”
The SEC charged Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker and clearing agency, in addition to failing to register the offer and sale of its crypto asset staking-as-a-service program.