Will the CFTC’s suit against Binance help Coinbase?

“Like come on. They are here for crime,” Binance’s former chief compliance officer, Samuel Lim, wrote in a chat message referring to customers, including some from Russia.

The lawsuit, which also alleges that Lim and another colleague knew Hamas, a militant group, was trading on the exchange, is the first in a long-anticipated barrage of legal and regulatory action against Binance, headed by crypto celebrity Changpeng “CZ” Zhao.

While the CFTC’s accusations obviously are a blow to the crypto giant, does it present a potential opportunity for U.S.-based competitor Coinbase?

Crypto crackdown

Analysts at Moody’s, S&P Global Ratings, and Oppenheimer & Co. all say the CFTC’s lawsuit is further evidence of an unstable regulatory environment, a continuing problem for Coinbase, which derives the lion’s share of its revenue from transaction fees. (A spokesperson for Coinbase did not immediately respond to a request for comment from Fortune.)

“We view it more as the continuation of a series of setbacks, of regulatory setbacks for the crypto industry,” Thierry Grunspan, a director at S&P Global Ratings who follows Coinbase, told Fortune.

In the past three months, the Securities and Exchange Commission has targeted a slew of well-known crypto firms, including Genesis, Gemini, Kraken, Paxos, and even Coinbase itself, which recently announced that it received a Wells Notice from the SEC, a document the regulator uses to alert companies they’re facing imminent legal action.

“My sense is more and more enforcement actions will come over the next few months or so,” Owen Lau, a senior analyst who covers Coinbase for Oppenheimer, told Fortune.

Will customers flee?

While the Binance lawsuit has made waves in the media, its effect on where traders will do business may be minimal, say the analysts.

“In terms of reputational damage,” Lau added, “there have always been accusations and investigations against Binance.”

However, he pointed out that the CFTC lawsuit specifically mentioned how traders were using VPNs—applications to obscure user locations—to access Binance’s international exchange. (CZ’s company has a U.S.-specific counterpart, Binance.US, to comply with federal and state regulations.)

Lau said it’s possible U.S.-based traders could move their business to other exchanges, like Coinbase, but few are expecting a huge shift in customer behavior.

“The clients that use Binance are typically different from the clients that use Coinbase,” Fadi Massih, a vice president and senior analyst at Moody’s, told Fortune. He said Coinbase’s exchange has limited offerings compared with those of Binance, which offers more leveraged products.

“We wouldn’t expect that shift to come back to Coinbase,” he added, pointing out that CME Group, a derivatives marketplace, may see more customers, as it offers Bitcoin and Ethereum futures and options.

‘Crystallization’ of oversight

The analysts who spoke to Fortune were quick to assert Coinbase’s current outlook hasn’t changed dramatically since the CFTC leveled accusations against its biggest competitor. That being said, they pointed out that the lawsuit may contain one silver lining: It specifies that Bitcoin, Litecoin, and Ether, Ethereum’s native cryptocurrency, are commodities.

SEC Chair Gary Gensler, on the other hand, still insists that every non-Bitcoin digital currency is a security. This battle over semantics has widespread ramifications, as the classification of cryptocurrencies could lead to heavy fines and penalties levied against companies that fail to comply with SEC regulations.

“Maybe not ‘a silver lining,’ but potentially it could be important,” said S&P Global’s Grunspan. “When you add up Bitcoin and Ethereum trading volumes, that’s really the vast majority of Coinbase spot-cash transactions in crypto.”

Massih, the analyst at Moody’s, agreed.

“It’s not a home run,” he added. “But at the same time, I think what we’re seeing is a crystallization of the regulatory oversight.”