According to Oppenheimer, it’s time to move to the sidelines on Coinbase Global. Analyst Owen Lau downgraded crypto exchange for better performance and removed his $70 price target, citing worrying regulatory signals for the technical asset sector numbers after the collapse of Silicon Valley Bank and Signature Bank and other banks. The downgrade comes after the US Securities and Exchange Commission slapped Coinbase with a Wells notice, saying it had identified possible violations of US securities laws. It also comes after the White House “strongly criticized” the digital asset sector this month. “While we are still very supportive of the development of digital assets/blockchains in the United States, in this unhealthy regulatory environment, we are increasingly concerned about the fairness of real actions. and the ecosystem’s ability to grow with support seems to be limited and shrinking from the government. banking system in the US,” Lau wrote on Thursday. Coinbase shares are up nearly 118% in 2023, outpacing the S&P 500’s 3% gain in the same time period. pre-marketing service on Thursday After attending a DC event and meeting with congressional staffers, the analyst said cryptocurrencies could be the “scapegoat” for the collapse of industry lenders. However, the analyst expects an increase in volatility that could mean a “binary outcome” for Coinbase, writing: “Bitcoin’s recent strength shows that people have clamored for financial systems. “Although we downgraded Coinbase stock, we believe that both upside opportunities and downside risks have increased. n significant and we may find an attractive risk/reward entry point in the future.” Other analysts commented on Coinbase following Wells’ announcement. Mizuho Securities’ Dan Dolev reiterated the underperforming rating on Coinbase, saying Wells’ announcement was a “significant overhang” of the stock in his view. The announcement could affect about a third of Coinbase’s revenue, according to the note. Trevor Williams of Jefferies, who has a holding rating on Coinbase, called Wells’ announcement an “ominous sign” that is likely “a precursor to an enforcement action.” Notably, revenue from alt coin trading and staking may be affected. —Michael Bloom of CNBC contributed to this report.