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Making sense of Coinbase’s post-settlement stock bump

The $100 million sum is the conclusion of a settlement with the New York State Department of Financial Services, which had been investigating the company for violating anti-money laundering laws and other legal requirements. The Exchange explores startups, markets and money. Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday. Among other things, regulators found that “Coinbase’s compliance system failed to keep up with the dramatic and unexpected growth of Coinbase’s business, and, by the end of 2021, was overwhelmed, with a substantial ​​backlog of unreviewed transaction monitoring alerts, exposing its platform to risk of exploitation by criminals and other bad actors.” While it seems baffling that Coinbase’s stock would be up after what looks like bad news, it is important to keep in mind that markets revolve around expectations. Anything that is anticipated, whether good or bad, is already taken into account — priced in — when valuing a company. In Coinbase’s case, that it is getting fined is not a surprise. The company disclosed that this investigation was in progress in its annual 10k filing in 2021. From the stock market’s perspective, the main piece of news is that the investigation, and uncertainty around it, is finally coming to a close.

Making sense of Coinbase’s post-settlement stock bump by Anna Heim originally published on TechCrunch

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