Among other things, regulators found that \u201cCoinbase\u2019s compliance system failed to keep up with the dramatic and unexpected growth of Coinbase\u2019s business, and, by the end of 2021, was overwhelmed, with a substantial \u200b\u200bbacklog of unreviewed transaction monitoring alerts, exposing its platform to risk of exploitation by criminals and other bad actors.\u201d<\/p>\n

While it seems baffling that Coinbase\u2019s 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 \u2014 priced in \u2014 when valuing a company.<\/p>\n

In Coinbase\u2019s 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\u2019s perspective, the main piece of news is that the investigation, and uncertainty around it, is finally coming to a close.<\/p>\n<\/p><\/div>\n

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