US Cryptocurrency Exchange 'Coinbase' Reports First Earnings... $322 Million Net Profit Last Year

More than Double Sales Growth Last Year... Direct Listing Planned by End of March

[Image source= Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] The financial results of Coinbase, the largest cryptocurrency exchange in the United States, have been disclosed for the first time. This was revealed through a report submitted by Coinbase to financial regulatory authorities.

Coinbase stated that it has undergone multiple investigations since 2017 at the request of the Commodity Futures Trading Commission (CFTC), and in December last year, it received a data submission request from the Securities and Exchange Commission (SEC). Coinbase explained that such investigations are routine procedures for companies preparing to go public. According to insiders, Coinbase is aiming for a public listing by the end of March.

According to the report submitted by Coinbase to financial authorities, the company recorded a net profit of $322 million and revenue of $1.3 billion last year. It turned profitable from a $30 million loss in 2019, and its revenue more than doubled from $534 million in 2019.

The Financial Times (FT) explained that if Coinbase goes public, it will become one of the largest information technology (IT) companies this year. Upon listing, Coinbase's corporate value is estimated to reach $100 billion. Three years ago, it was valued at less than $8 billion. The recent rapid growth of the cryptocurrency market has significantly boosted Coinbase's corporate value.

Coinbase is expected to pursue a direct listing without raising additional capital through a public offering. Brian Armstrong, CEO of Coinbase, stated that investors should be aware that Coinbase's financial results may be highly volatile.

Coinbase revealed that nearly all of its revenue comes from fees related to cryptocurrency trading.

Last year, the average monthly trading volume was 2.8 million transactions, nearly tripling compared to 2019. As the prices of cryptocurrencies such as Bitcoin soared, trading volume also increased. As of the fourth quarter of last year, institutional investor trades accounted for two-thirds of total transactions. The number of members was confirmed to be approximately 43 million.

Coinbase stated that the significant increase in trading volume last year and this year has attracted greater attention from regulatory authorities, which could pose a risk factor. Coinbase has been investigated after receiving subpoenas from current and former employees and the CFTC, and it has cooperated with all CFTC investigations. In addition to the CFTC and SEC, Coinbase received data submission requests from the California Attorney General's office in 2019 and similar requests from the Massachusetts Attorney General's office.

Coinbase also disclosed that it has invested in over 100 companies through venture capital.

Coinbase further stated that approximately $90 billion worth of cryptocurrency is traded on its platform, reflecting about 11% of the total cryptocurrency market as of the end of last year.

Major shareholders holding more than 5% of Coinbase's shares include venture capital investors Andreessen Horowitz, private investment firm Paradigm, Ribbit Capital, Tiger Global Management, and Union Square Ventures.

This content was produced with the assistance of AI translation services.