Hamas Use of Crypto Funding Raises Concerns for Coinbase’s Lobbying Efforts in the U.S.

Hamas Use of Crypto Funding Raises Concerns for Coinbase’s Lobbying Efforts in the U.S.

Crypto News – Reports that Hamas is financing attacks on Israel using cryptocurrencies could damage Coinbase’s lobby for cryptocurrencies in the United States, according to Mark Palmer, chief analyst at Berenberg.

The use of cryptocurrencies by Hamas members to finance attacks on Israel could set back Coinbase’s cryptocurrency lobby in the United States, according to a new investment report from Berenberg Capital Markets.

The Financial Times reports that Israeli authorities have taken measures to close accounts used to aid Hamas and seize more than 100 accounts on Binance and other crypto exchanges. Millions of dollars worth of cryptocurrencies were seized in this operation.

“Although Hamas announced last April that it would no longer use crypto money to fundraise due to its ability to track its movements in blockchain records, we believe that recent news will make the clarity about the legal status of crypto coins even more uncertain,” Palmer wrote.

Over the past few years, Coinbase has greatly increased its lobbying efforts to see clearer and crypto-friendly regulations introduced in the country.

Berenberg analysts reiterated their “hold” recommendation on Coinbase (COIN) stock and maintained a price target of $39.

Coinbase shares were trading at $77.30, up 3% on the day, according to data from TradingView at the time of publication.

Palmer made the following statements:

“We continue to maintain a cautious view on COIN, especially after the stock is up more than 112% this year, about 72% for Bitcoin and about 29% for the tech-heavy Nasdaq.

Our ‘hold’ rating on COIN reflects our view that the stock is not investable in the near term.”

Palmer also explained that Coinbase’s ongoing legal battle with the US Securities and Exchange Commission could continue to be an “overhang” to any positive momentum in the company’s share price.

While Palmer noted weaker-than-expected trading volumes due to a “prolonged crypto winter”, he said that Berenberg had raised its estimate for the company’s consumer transaction revenue to $240.8 million from $210 million.

This adjustment was made to reflect his expectation that Coinbase’s consumer take rate “will decline at a slower pace than we had anticipated”.

In addition, Palmer explained that the crypto exchange’s large cash balance provides it with “cushion and flexibility,” and he expects management to continue to reduce expenses and extend its runway going forward.

“Given those factors, as well as the fact that COIN is a crowded short, we believe shorting the company’s shares outright represents a risky strategy, especially as the stock could be prone to abrupt upside moves as the company pushes through its legal battle with the SEC.”