Coinbase, one of the leading cryptocurrency exchanges, finds itself in turbulent waters. The reason? The recent involvement of Hamas, a Palestinian militant organization, in using cryptocurrencies to finance its operations, especially in relation to attacks on Israel.
The situation became more complicated when, last week, Israeli authorities closed and confiscated more than 100 accounts on several cryptocurrency exchanges, including the giant Binance. These accounts were being used by Hamas in its fundraising efforts. The operation resulted in the seizure of millions in cryptocurrencies.
While Hamas has stated in the past that it would abandon the use of cryptocurrencies due to tracking concerns, recent events have brought to light doubts about the legality of cryptocurrencies in such contexts.
Coinbase, which has strived to promote a friendlier regulatory environment for cryptocurrencies in the United States, is now seeing its lobbying efforts being challenged. The Israel-Hamas conflict and resulting regulatory actions are creating significant obstacles for the exchange.
The Berenberg Capital Markets report, signed by analyst Mark Palmer, points to the challenges Coinbase faces in the US, especially in relation to defining the legal framework for cryptocurrencies. The Hamas situation adds an extra layer of complexity to the picture.
Berenberg analysts, in turn, took a more conservative approach to Coinbase. They maintained their “hold” recommendation on the company’s shares, with a price target of $39. Mark Palmer commented: “The view on Coinbase is cautious, especially considering the stock’s appreciation this year.”
However, despite the challenges highlighted in the Berenberg report, the market appears to maintain a certain optimism. Coinbase shares traded at $77.30, up 3% on the day.
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