Crypto exchange firm Coinbase on Thursday was downgraded by analysts at financial services firm Cowen. Crypto companies face increased scrutiny following the collapse of FTX and the overall decline in trading volumes in the crypto market.

Cowen downgrades Coinbase stock (COIN) from "Outperform" to "Market Perform" rating despite investors hoping for a recovery in the crypto market. Cowen's analysts Stephen Glagola and George Kuhle believe the collapse of Sam Bankman-Fried's crypto exchange FTX has led to increased scrutiny from the regulators U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

"COIN's monthly trading volumes have seen a fairly consistent drawdown each subsequent month since November 2021, and there remains low visibility into either a stabilization or rebound in retail trading volumes over 2023 given the macro backdrop and FTX contagion risks on crypto asset prices."

The analysts also its COIN price target to $36 from $75. Coinbase shares fell nearly 84% in 2022, from $232 a year ago to $37.70 at Wednesday's close. At the time of writing, the COIN price is trading at 35.12, down 6% in pre-market trading hours.

In December, Mizhuo also downgraded Coinbase to underperform and said the COIN stock could drop 30%. Additionally, crypto exchange Coinbase has to pay a $50 million fine to the New York State Department of Financial Services for allowing consumers to register accounts without background checks. Also, the exchange will invest $50 million to strengthen its compliance program.