A strong liquidation in the Coinbase (Coin) actions can be an exaggerated reaction to two bad news that reached the same day, according to Barclays and Oppenheimer analysts.
The actions of the cryptographic exchange fell by 7.2% on Thursday after revealing a violation of data promoted by social engineering and subsequent reports revealed an investigation of the Commission of Securities and Long Securities (SEC) (SEC) of long data on whether the company exaggerated the numbers of user in its presentation of the initial public offer (OPI) of 2021. The intradication fall of the action reached almost 9% before recovering slightly.
Read more: Coinbase could pay customers up to $ 400 million for data violation
Barclays said the market is likely that the price is too risk, qualifying the “something exaggerated” reaction. The firm emphasized that the cyber attack arose from bribery customer service agents instead of a Blockchain security failure.
According to the Coinbase blog post, a group of foreign agents were paid to filter customer data, including names, addresses and masked social security numbers, that scammers used to convince users to send encryption assets.
Coinbase refused to pay a ransom of $ 20 million required by computer pirates. Instead, he has pledged to reimburse affected customers and are working with the police. Less than 1% of transaction users were affected, and no passwords, private keys or customer funds were directly accessed.
Read more: SEC is probing Coinbase about error concern for the emission of user numbers
Oppenheimer echoed the opinion of Barclays, writing that although the violation damages the company’s reputation, it seems to be isolated and not indicative of a broader systemic risk. Coinbase estimates that it will spend between $ 180 million and $ 400 million to cover customer losses, legal expenses and a new rewards program aimed at catching perpetrators.
As for the SEC probe, it refers to the figure of 100 million “verified users” in Coinbase S-1 presentation during its 2021 IPO. Coinbase stopped informing this metric more than two years ago, and analysts believe that the investigation has been underway from the Biden administration.
Paul Grewal, legal director of Coinbase, said that the investigation should not be extended and is not related to the company’s current performance.
The double dose of bad news occurs a few days after Coinbase actions increased in the news, it would be added to the S&P 500, which may have made the actions vulnerable to a setback.
In a note for customers, Barclays said investors can be reacting not only to the news itself, but also to the rapid increase in shares in recent days. Oppenheimer described the current weakness in the price of “a purchase opportunity” and reaffirmed its higher performance qualification.
In any case, the episode underlines the thin line that crypto firms walk between technological robustness and human vulnerability. And although the consequences can be manageable, the coinbase response, and the market memory, will shape how long the shadow of this violation lasts.
Mark Palmer, Benchmark analyst, also minimized the long -term importance of rape, characterizing it as a unique and unique incident instead of evidence of deeper security defects. He pointed out that the attackers obtained access through bribery customer service contractors instead of the central Coinbase systems, which remained intact. Passwords, private keys or client funds were not committed.
Palmer also dismissed the research of the SEC on the metrics of previous coinbase users as “little more than noise”, noting that it relates to a metric that the company stopped informing more than two years ago.
Despite the main risk, he reaffirmed his upward perspective, raising his target price in Coinbase to $ 301 from $ 252 and emphasizing the company’s potential to benefit from the growing institutional adoption as it improves regulatory clarity.
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