Moody's lowers rating on Coinbase

SEC lawsuit affects prospects Coinbase. Credit rating agency Moody's has issued a downgrade.

Rating agency Moody's has downgraded the rating of U.S. crypto exchange Coinbase from stable to negative. "The change in outlook from stable to negative reflects the uncertain extent of the impact of the SEC's indictments on Coinbase's business model and cash flow." according to Moody's on June 8.

Despite the downgrade, the agency admits Coinbase has a "healthy liquidity position."

As of March 2023, Coinbase had US$5 billion in cash and US$0.3 billion in USDC, according to the rating. "Compared to its US$3.4 billion in long-term debt," the analysts thus come to a positive conclusion in this regard.

Moody's expects Coinbase to "continue to focus on cost containment." This has helped offset the negative impact of the decline in transaction revenue "following the spike in activity after the coronavirus pandemic outbreak."

Op June 6, the SEC sued Coinbase to. As a result, the company's stock price came under considerable pressure.