Coinbase seen as clear frontrunner after Binance, Changpeng Zhao capitulate to US DoJ

• Coinbase could be the de facto crypto exchange for investors as Binance navigates negative publicity, likely affecting its spot dominance.
• Having exercised caution with some regulation and compliance, the US-based platform’s approach could finally pay off.
• COIN stock is up 5% on the day as investors, including Ripple lawyer acquire more Coinbase shares.

Coinbase exchange, the main market rival against Binance exchange following the collapse of FTX, is seen emerging as the clear frontrunner after the largest cryptocurrency exchange and its CEO Changpeng Zhao (CZ) capitulated to the US Department of Justice (DoJ).

Also Read: Binance settles with US DoJ as markets anticipate official announcement, CZ steps down as CEO

Coinbase could be the de facto crypto exchange after Binance debacle

Coinbase exchange stands to benefit the most, now that Binance exchange has succumbed to the US DoJ, with CZ officially stepping down as CEO, and advertently naming Richard Teng, former Global Head of Regional Markets, as the new CEO.

With Binance in trouble, Coinbase CEO Brian Armstrong has ushered the exchange to the stage, saying, “We now have an opportunity to start a new chapter for this industry…Americans should not have to go to offshore unregulated exchanges to benefit from this technology.”

Pedaling the US as the rightful hub for crypto, Armstrong says Coinbase believes in economic freedom, demonstrating belief that the US democratic system will eventually get things right.

Ripple lawyer, John E. Deaton, seems to agree with Armstrong, acknowledging, “Coinbase will be a big winner.” His speculation comes on the back of the exchange-traded funds (ETFs) narrative that essentially stands on the shoulders of Coinbase.

Specifically, Coinbase Inc. has been featured in the spot ETF applications of multiple institutional players, including BlackRock, Chicago Board Options Exchange (CBOE), Fidelity, and Vanguard, listed for their surveillance sharing agreement (SSA), as indicated on Nasdaq's 19b-4 form.  Its position as the largest crypto exchange in the US is likely the driving force for its popularity.

An SSA, short for Surveillance Sharing Agreement, defines an arrangement between crypto exchanges and regulators or market surveillance providers such as the SEC. It enhances the crypto market's integrity and transparency by sharing trading data and information. 

Coinbase operates a significant part of the US-based spot trading platform for Bitcoin, representing a substantial portion of US-based and USD-denominated Bitcoin trading. Its collaboration with the CBOE ETF applications started on June 21.

At some point, the feature was a complication with the SEC citing cryptocurrency exchanges operating "conflicting activities" despite having "limited monitoring.”

If spot ETFs are approved, the institutional players would be able to share trade data with the commission, and book information, among other relevant market data. This would help put out or reduce the SEC's suspicion of market manipulation and allow it to confirm the lack thereof.

With Coinbase likely to become the frontrunner, Deaton has revealed having added to his Coinbase shares bucket by acquiring more COIN.

Coinbase COIN shares climb as the exchange takes the stage as likely de facto crypto platform

Coinbase (COIN) shares have climbed at least 5% on the news of the Binance exchange saga, testing the supply zone extending from $105.31 to $110.01. At the time of writing, COIN is trading for $105.54.

To confirm the continuation of the trend, the price must break and close above the midline of the supply barrier at $107.38, which would potentially set the tone for COIN price to clear the range high at $114.43, levels last tested on July 14.

COIN 1-day chart

(This story was corrected on November 22 at 07:41 GMT to say that Binance settled with the US Department of Justice, not the US Securities and Exchange Commission.)