Editor's note: Coinbase (COIN) stock recently hit an 18-month high. According to TradingView data, on November 27th, Coinbase closed at $119.77, the highest level since May 5th, 2022. Bloomberg ETF analyst James Seyffart's analysis shows that Coinbase is the custodian of 13 of the 19 spot crypto ETFs currently awaiting approval from the US Securities and Exchange Commission.

Many people believe that Binance's settlement with US regulators is a positive development, and Coinbase, as the leading US trading platform, also seems to be seen as benefiting from the Binance settlement. However, the entry of BlackRock in the future and the direction of regulation also add unpredictability to Coinbase's development prospects.

Original Title: Does Coinbase benefit from Binance's guilty plea?

Original Author: Joanna Wright, DLNews

Original Translation: Kaori, BlockBeats

With the resolution of Binance's legal uncertainty, Coinbase, as the largest cryptocurrency trading platform in the United States, finds itself in a prominent position.

On the one hand, it has the opportunity to seize a portion of Binance's market share in the United States. On the other hand, legal experts point out that Binance's regulatory ripples will pose a challenge to Coinbase's business model.

Before delving deeper, let's first do a quick review:

Binance, the world's largest cryptocurrency trading platform, pleaded guilty to criminal charges in the United States for failing to establish anti-money laundering protections. According to the settlement agreement reached between Binance and the authorities, Binance will pay a fine of $4.3 billion and accept an intensive monitoring program for three years. Its CEO and founder, CZ, has resigned from his position.

This is related to Coinbase?

Silicon Valley veteran Brian Armstrong founded Coinbase in 2012. The exchange platform chose a compliant path by obtaining state licenses, conducting strict reviews and restrictions on listed currencies, and even going public in 2021.

This approach cost Coinbase dearly when Binance emerged in July 2017.

As Armstrong recently wrote on X, going public means Coinbase "can't always move as quickly as other companies."

"Taking compliant measures is even more difficult and expensive. When it comes to illegal activities, you cannot offer every product that customers want," said Armstrong.

Regulators accuse CZ and Binance executives of knowingly violating securities laws to gain illegal profits. Binance also operates with layers of obfuscation, making its corporate structure difficult to trace - for example, it does not list a board of directors or headquarters in any country. At its peak, Binance accounted for 60% of global cryptocurrency trading volume and still holds approximately 43% of the market share.

Coinbase will face a more flexible market

Last week's events proved that Armstrong's cautious approach was correct.

Binance has started to delist trading pairs and assets, including the token TORN of the sanctioned cryptocurrency mixer Tornado Cash.

It now must strengthen compliance and can no longer act quickly and violate rules. This will come at a cost for Binance. After consulting with most legal experts, it is widely expected that Binance will completely withdraw from the United States.

This is good news for US competitors, especially for companies like Coinbase that are striving to meet regulatory standards, said Aron Unterman, Managing Director of XReg Consulting. "This is a good situation for those companies, although it is a disadvantage in terms of market share for quite some time," he said.

In addition, the punishment of Binance has made Coinbase face a more flexible market.

"If this had happened a year ago, it would have caused significant chain reactions and severely damaged the cryptocurrency market," said Unterman. "But this impact did not cause panic or concern about other failures. This was expected and created opportunities for other participants in the market."

竞争对手不止 Binance

Competitors are not limited to Binance

However, Binance's ruling will also put Coinbase in a more complex situation.

Cryptocurrency investors are eagerly awaiting regulatory approval for spot Bitcoin exchange-traded funds (ETFs) submitted by heavyweight asset management companies like BlackRock.

According to some market observers, the fact that the world's largest trading platform is no longer a company under investigation has given legitimacy to the industry and increased the likelihood of ETF approval.

However, for Coinbase, it is not purely an advantage. Competition from BlackRock may compress fees to almost zero, which is a blow to a trading platform that charges anywhere from 0.6% to 3%.

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