Coinbase is directly and indirectly threatened by regulations. The direct threat is that the SEC, China, European regulators, etc. impose much stricter regulations on cryptocurrency exchanges like Coinbase, raising compliance costs until the business fails; indirectly, if the regulations are applied "downstream" to payment processors dealing in cryptocurrencies or to businesses accepting cryptocurrency payments. Another indirect threat is in the form of environmental regulations being more strictly applied to mining operations, which could be fatal for Bitcoin or any other PoW based system (yeah, sure, PoS, PoWhatever, but Bitcoin is half the market for cryptocurrency).

There is also an "inverse" regulatory risk for Coinbase. In the best case (where cryptocurrencies are actually being used as payment systems at any significant scale) cryptocurrencies fill a need that is not being filled by existing banks as a result of regulations on the financial industry. Instead of more stringent regulations being imposed on cryptocurrencies, less stringent regulations could be imposed on the mainstream financial system that would allow banks to create more convenient electronic payment systems. The need for a cryptocurrency exchange could implode if the relevant technologies (e.g. offline ecash) were deployed; you would "withdraw" or "deposit" money in the bank just like paper notes. There is even a case for such a system if banking regulations became stricter e.g. if banks were forced to deploy a less fraud-prone and more privacy-preserving system than the credit/debit card system in use today.

Generally speaking, regulation is most easily dealt with by the market leader. They have capital that can be used to meet requirements, and can engage with regulators to make sure the regulation can be achieved by them.

That actually improves the situation for them. (Similar to how GPDR improved Google and Facebook's position in the ad market against competitors)

Did you read what you were replying to? Regulations elsewhere in the market could threaten Coinbase, regardless of their ability to handle compliance costs in their own niche. In their own filing Coinbase admitted that the value of their company is highly correlated with the value of Bitcoin and other cryptocurrency -- so any regulation that impacts Bitcoin will likely impact Coinbase, even if the impact is indirect.

It's more than that in my mind. Coinbase is embracing regulation and leveraging it as a differentiator. They are going to be in a better position than anyone to close the loop to regulatory capture.

Coinbase is hugely threatened by regulations.

They are, but at the same maybe they’ll get big enough to get small fines for big crimes like HSBC helping out the cartels.

I hate this meme. HSBC used their judgement about something for which the law said they had to use their judgement. Then their judgement turned out to be wrong and apparently that's now a crime. Foreign exchange has legitimate use cases, it's not remotely comparable to cryptocurrencies.

Turning a blind eye to money laundering especially when given chances to fix it, and given that money laundering is enabling criminal enterprise that fucks up everyones life, from a household name bank that used to be my high school bank (point is how they market themselves as a nice bank) well I don’t know what to say. Not a meme though.

It's a meme in the sense that it's propagated virally and the story has mutated as it goes. There's no evidence that HSBC were wilfully blind to anything.