Coinbase Partners with US DOJ Agency in $32M Crypto Custody and Trading Deal

It has positioned itself as a key partner for various spot cryptocurrency exchange-traded funds (ETFs).

Bolstering Law Enforcement Ties Amidst $256 Bn Institutional Trading Quarter

In the first quarter of 2024, Coinbase reported an impressive institutional trading volume of $256 billion.

In a recent blog post, Coinbase highlighted its ongoing commitment to assisting law enforcement agencies, a pledge that dates back to the creation of its law enforcement program in 2014.

According to  the company:

“Today, Coinbase works with every major U.S. federal, state, and local law enforcement agency, as well as international agencies on every continent. Growing the cryptoeconomy means promoting safe and efficient markets, and these partnerships are critical to our mission.”

Coinbase, while establishing itself as a significant player in the cryptocurrency custody and trading space, has not been without its regulatory challenges.

In April, the US District Court for the Southern District of New York, under Judge Katherine Polk Failla, allowed the SEC’s lawsuit against Coinbase to move forward. This legal action challenges whether Coinbase operates as an unregistered securities exchange, broker, and clearing agency. Coinbase had sought to dismiss the lawsuit but was unsuccessful.

Adding to its regulatory woes, Coinbase has recently claimed that both the SEC and the Federal Deposit Insurance Corporation (FDIC) are unjustly hindering its attempts to access certain documents. The exchange argues that these documents should be accessible under the Freedom of Information Act (FOIA), indicating a possible overreach or misuse of authority by the regulators.

On a more positive note, Coinbase has seen an improvement in its financial market standing. Bank of America recently upgraded  its rating on Coinbase shares from underperform to neutral, significantly raising its price target from $110 to $217.

Similarly, the investment banking firm KBW adjusted  its price target for Coinbase, increasing it from $160 to $230, while maintaining a market performance rating. These adjustments reflect a growing confidence in Coinbase’s market position and future prospects despite its ongoing regulatory battles.