Coinbase’s chief legal officer, Paul Grewal, announced that the crypto exchange has filed a closing brief in the Third Circuit challenging the SEC’s denial of their rulemaking petition. The brief argues that the SEC’s order, which disagrees with claims that SEC rules are unworkable for digital asset firms, lacks reasoned decision-making. Grewal asserts that the […]
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SEC Rejects Coinbase’s Call for New Crypto Regulations
In a recent legal filing, the U.S. Securities and Exchange Commission (SEC) pushed back against Coinbase’s demands for a completely revamped regulatory framework for cryptocurrencies. The agency argued that existing rules are adequate and that it’s not required to create new regulations from scratch as Coinbase suggests. SEC Clings to Century-Old Rules in Response to […]
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SEC Opposes Coinbase’s Appeal Request in Ongoing Legal Battle
The U.S. Securities and Exchange Commission (SEC) has urged a federal court to deny Coinbase’s interlocutory appeal, following a recent court decision that allowed a lawsuit involving the SEC and the cryptocurrency platform to proceed. Last month, Coinbase sought appellate review after failing to get the case dismissed, marking a significant development in the ongoing […]
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4 Surprising Insights From Coinbase’s Earnings, COIN Sees Bullish Surge
The foremost crypto exchange in the United States, Coinbase, released its earnings report on February 15th. As expected, there were major takeaways from the financial report, highlighting the crypto company’s performance in the fourth quarter of last year.
Coinbase’s Trading Volume Exceeds Expectations
Coinbase maximalist Coinbase Duck noted in an X (formerly Twitter) post how the crypto exchange defied expectations in the fourth quarter of 2023. Coinbase recorded 0.6 billion in spot trading volume, exceeding the estimated 8.
Specifically, a considerable influx of retail investors accounted for 18% of the total spot trading volume against the estimated 16% that the crypto exchange was projected to record. The return of these retail investors is believed to have been partly due to the resurgence that Bitcoin and the broader crypto market experienced towards the end of the year.
Meanwhile, consumer transaction revenue (2.5 million) was way below the estimate of 0.9 million. However, Coinbase Duck noted that this wasn’t necessarily bad, as some investors started using advanced trading.
In a letter to its shareholders, the crypto exchange also revealed that some existing users traded significantly higher volumes, which could have necessitated the move to advanced trading.
Coinbase also recorded a total operating expense of 8 million, which happened to be below the projected estimate of 8 million. Specifically, the crypto exchange did a great job in its transaction expenses, recording an expense of 6 million compared to the estimate of 3 million.
However, the company’s sales and marketing expenses (6 million) exceeded the estimate of million. Coinbase revealed that this growth was “primarily driven by higher seasonal NBA spending, higher performance marketing spending due to strong market conditions, and increased USDC reward payouts due to growth in on-platform balances.”
Coinbase Had A Profitable Fourth Quarter
Coinbase recorded a net income of 3 million, beating the estimate of 4 million. Interestingly, going by figures from its Shareholder letter, the fourth quarter of 2023 was the only one in the year in which the crypto exchange didn’t record a loss for its net income. Meanwhile, the company also recorded its largest net revenue during that period.
Coinbase suggested that the excitement around the Spot Bitcoin ETFs and the expectations of more favorable market conditions in 2024 had contributed to its success in Q4 of 2023. Coinbase is a primary custodian for most Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT).
Meanwhile, the crypto exchange earned .13 per share, beating the forecast of .43. This is without the crypto exchange accounting for the FASB change, which Coinbase Duck revealed could bring its earnings per Share (EPS) to .1.
Chart from Tradingview
Britain’s Former Finance Minister George Osborne Joins Coinbase’s Global Advisory Council
Britain’s former chancellor of the exchequer, George Osborne, joins Coinbase’s global advisory council. Osborne becomes the latest high-profile politician to join the crypto exchange’s advisory council. The former finance minister has said he is looking forward to working with Coinbase as it builds “a new future in financial services.”
Coinbase to Tap Into Osborne’s Wealth of Experience
George Osborne, the former British finance minister, has joined the global advisory council of the U.S. cryptocurrency exchange Coinbase. Osborne joins Mark Esper, the former U.S. Secretary of Defense, and former U.S. Senator Patrick Toomey (R-PA) who already serve as the crypto exchange’s global strategy advisers.
Coinbase, which has faced off with U.S. regulators like the Securities and Exchange Commission (SEC), praised Osborne’s addition to the growing list of powerful politicians who advocate or support the crypto cause. Remarking on Osborne’s appointment, Faryar Shirzad, Coinbase’s chief policy officer, said:
“Pleased to have George join our council at an exciting time for us in the U.K. and globally. George brings with him a wealth of experience in business, journalism and government. We look forward to relying on his insights and experiences as we grow Coinbase around the world.”
Financial Markets Transformation and the Blockchain Link
According to a CNBC report, Coinbase has hired the former British Chancellor of the Exchequer, George Osborne, to connect the company with politicians and regulators. Coinbase hopes that such connections will help influence legislators and regulators to come up with crypto-friendly regulations.
Osborne, who served as the Chancellor of the Exchequer between 2010 and 2016, linked the financial markets’ transformation to the blockchain. The former finance minister said he is looking forward to working with Coinbase as it builds “a new future in financial services.”
Meanwhile, the confirmation of Osborne’s appointment to the advisory council was immediately followed by reports suggesting that Coinbase and Ripple are among the biggest financial backers of the super political action committee (PAC) Fairshake.
Fairshake reportedly aims to support pro-crypto politicians on both sides of the divide. It has raised million with crypto firms alone accounting for two-thirds of this. The other major crypto donors are Andreessen Horowitz’s a16z and Electric Capital.
What are your thoughts on this story? Let us know what you think in the comments section below.
Crypto Community Raises Alarm Over Coinbase’s Dominance Of Bitcoin Held In Spot ETFs
Coinbase, the largest cryptocurrency exchange in the United States, is presently serving as the custodian of the majority of the Spot Bitcoin ETFs managed by various asset management companies in the industry. This notable concentration is raising worries in the crypto community about significant centralization and potential risks associated with the custodianship.
Coinbase Dominate ETFs As Major Custodian
Coinbase’s significant role in the advancement of Spot Bitcoin ETFs has become a target of scrutiny in the crypto community. The American crypto exchange is currently the custodian of 9 out of 11 Spot Bitcoin ETF companies, including BlackRock, Grayscale, Ark/21 Shares, Bitwise, WisdomTree, Invesco/Galaxy, Valkyrie, GlobalX, and Franklin Templeton.
Notably, only Fidelity and VanEck have opted for alternative custodianship approaches. Fidelity is employing a self-custody program for its Spot Bitcoin ETF, while VanEck has selected Gemini, a crypto exchange, as the custodian for its Spot BTC ETF.
The prominent role of Coinbase as the major custodian for Spot BTC ETFs has raised serious questions and concerns in the crypto community. Specifically, Gabor Gurbacs, Director of Digital Assets Strategy at VanEck, has deemed Coinbase’s concentrated level of custodianship to be a “double-edged sword.”
Gurbacs stated that Coinbase would bear substantial responsibility as the primary custodian for Spot Bitcoin ETFs and would reap significant benefits from it. However, he also hinted at potential counterparty risks associated with concentrating assets within a single entity.
Similarly, a crypto analyst on X (formerly Twitter) highlighted the potential for increased scrutiny from the United States Securities and Exchange Commission (SEC) regarding Coinbase, given its prominent position in the Spot Bitcoin ETF market. The crypto exchange is presently in a legal battle with the SEC, and many crypto enthusiasts believe that Coinbase’s regulatory challenges may pose a threat to the success of Spot BTC ETFs.
Coinbase CFO Bullish On Bitcoin ETFs
The Chief Financial Officer of Coinbase, Alesia Haas appeared recently in an interview on Bloomberg TV, discussing the effects of Spot Bitcoin ETFs in the crypto market.
When asked if the momentum of Spot Bitcoin ETFs would become a “game-changer” in the future, Haas responded confidently with a resounding “absolutely.”
The Coinbase CFO declared that the SEC’s approval of Spot Bitcoin ETFs was an important day for crypto, as it positions Bitcoin into a much broader investable asset class. She also revealed that the deployment of Spot Bitcoin ETFs would allow investors to have greater access to BTC products, extending its reach to billions of people around the globe and increasing the amount of inflows into ETFs.
Coinbase’s Rollup Base Updates Roadmap and Goals for 2024
Base, the Coinbase incubated rollup, has updated its roadmap and goals for 2024. In a blog post, Base informed that it will not only focus on building a development platform but on fostering the decentralization of such an environment, building on-chain apps, and bringing liquidity to its ecosystem.
Base to Focus on Building a ‘New Economy’ in 2024
Base, the Coinbase incubated Ethereum rollup, has revealed an updated roadmap for 2024. The rollup indicated that it will now focus not only on building a “world-class on-chain development platform” but also on the apps that can be built on top of it and the capital that moves through them.
This commitment comes as part of the new conception of the Base ecosystem, which is now conceived as a three-layer platform, with an app ecosystem layer and a market layer on top of its development component. For this task, Base wants to establish itself as a rollup with a large capital component, coming from native and interconnected apps from Ethereum and other rollups.
With this new set of goals, Base aims to attract “over 1 billion people to a flourishing ecosystem of applications that enable the next wave of global creativity and innovation.”
Technically, this involves different sets of tasks, which include launching fault proofs to evolve to a Stage 1 rollup, the reduction of fees by the adoption of EIP-4844 (Proto-Danksharding), advancing the adoption of ERC-4337 and smart wallets, improving the availability of Base’s on and offramps, and further integrating Base into Coinbase’s ecosystem.
On the human side, Base announced it will keep supporting developers with its Grants program and supporting gasless interactions and coding learning initiatives. According to L2beat, Base is currently the third rollup with most total value locked (TVL), with over 0 million in its network.
In September, Base grew to have a TVL of 0 million, overtaking Solana’s numbers at the time.
What do you think about Base’s updated roadmap and goals for 2024? Tell us in the comments section below.
SEC Denies Coinbase’s Petition for Clear Crypto Regulation — Exchange Responds by Taking the Regulator to Court
The U.S. Securities and Exchange Commission (SEC) has rejected cryptocurrency exchange Coinbase’s petition for regulatory clarity in the crypto industry. SEC Chairman Gary Gensler backs his agency’s decision to deny Coinbase’s petition. In response, Coinbase has pursued legal action against the securities regulator to challenge this decision.
Coinbase Challenging SEC’s Decision in Court
The U.S. Securities and Exchange Commission (SEC) has denied Coinbase Global’s Petition for Rulemaking. The crypto exchange filed the petition in July last year, seeking regulatory clarity, including “potential rules to identify which digital assets are securities.” With no response from the SEC for 18 months, the crypto exchange escalated the matter to court, prompting the agency to respond with the denial on Friday.
SEC Chair Gary Gensler issued a statement regarding the denial:
I was pleased to support the Commission’s decision for three reasons.
“First, existing laws and regulations apply to the crypto securities markets. Second, the SEC addresses the crypto securities markets through rulemaking as well. Third, it is important to maintain Commission discretion in setting its own rulemaking priorities,” Gensler detailed.
Coinbase’s chief legal officer, Paul Grewal, commented on X: “Today the SEC denied Coinbase’s petition for rules for crypto. After 18 months of silence, we went to court to get the response the law requires. With appreciation for the Third Circuit, later today we’ll again seek its help by challenging the SEC’s abdication of its duty.”
In a follow-up post, Grewal revealed:
Promise made, promise kept: we are now on file with Third Circuit to challenge the SEC’s arbitrary and capricious denial of our petition for crypto rulemaking. We again appreciate the court’s consideration.
The CEO of Coinbase, Brian Armstrong, wrote on X: “We went to court to challenge the SEC’s refusal to create clear rules for the industry — and it worked (a court compelled them to respond).” The executive added: “Now that they’ve formally responded (with a no!) we can challenge their response in court, which helps us get one step closer to regulatory clarity. The question is why doesn’t the SEC want to clarify outstanding regulatory questions for the crypto industry?”
What do you think about the SEC denying Coinbase’s petition seeking regulatory clarity for the crypto industry? Let us know in the comments section below.
Backed Finance Tokenizes Treasury Bond ETF on Coinbase’s Base Network
Backed Finance, a real-world asset tokenization issuer, announced its successful issuance of the first tokenized security on Coinbase’s Base, a layer two (L2) blockchain. The team introduced bIB01 tokens to the decentralized finance (defi) sector, mirroring the price dynamics of the Ishares short-term Treasury bond ETF.
Tokenizing U.S. Bonds on Coinbase’s L2
According to Backed Finance’s team, tokenized real-world assets have been successfully issued on the Base blockchain network. These “b tokens,” or Backed Tokens, are ERC20 coins representing ownership of structured product units. Each token corresponds to a unit of a fully collateralized tracker certificate, which traces the listed value of a specific traded security and is wholly supported by that underlying security, according to Backed.
“Backed has issued the first tokenized security on Base – bIB01, a tokenized short-term U.S. treasury bond ETF. Base, Coinbase’s L2 network, offers a low-cost, developer-friendly way to build onchain,” the team disclosed on October 6, 2023.
Backed’s bIB01 tokens are not available to U.S. users. However, they provide eligible crypto market participants with a U.S. dollar-denominated, regulatory-compliant government bond from the U.S. Treasury. Backed says these tokens maintain the benefits of blockchain technology. “We are incredibly excited to see how Base follows through on its commitment to be developer friendly,” Giorgio Giuliani, Backed’s head of product said.
While U.S. investors can’t access b tokens, potential investors must meet rigorous know-your-customer (KYC) and anti-money laundering (AML) standards. Backed isn’t alone in its endeavor to introduce Treasury bills to the tokenized realm; Truefi is in the mix with its tokenized T-bills. As the lines between blockchain and conventional finance blur, Ondo, Flux, and Pendle are also competitors, bolstering the fusion of real-world assets with defi protocols.
What do you think about Backed’s T-bill tokens launching on Base? Share your thoughts and opinions about this subject in the comments section below.
SEC Seeks Rejection of Coinbase’s Pushback Against Its Lawsuit
The U.S. Securities and Exchange Commission (SEC) has asked a judge to reject Coinbase’s attempt to have the regulator’s lawsuit against it dismissed. The exchange had alleged that the agency overstepped its authority and abused its discretion in claiming that digital assets offered on the trading platform were unregistered securities.
SEC Adds Arguments to Support Its Claim That Crypto Assets on Coinbase Amounted to Securities
The securities regulator in the United States is not giving up on its litigation against America’s leading cryptocurrency exchange. On Tuesday, the SEC asked a federal judge to reject the attempts of Coinbase to have the Commission’s lawsuit against it dismissed.
In its legal case filed in early June, the SEC alleged that Coinbase evaded its regulations for years and infringed upon various securities laws by illegally operating an unregistered exchange, brokerage and clearing agency. The lawsuit came after the regulatory body sued , the world’s largest crypto exchange, based on similar allegations.
In August, Coinbase urged the court to toss the SEC case, stating that the agency had “overstepped its statutory authority,” “abused its discretion,” and abandoned its own earlier interpretations of the U.S. securities laws.
In an Oct. 3 filing, quoted by Bloomberg, the agency added new arguments to support its case. It said that public statements made by issuers, “many of which were rebroadcast by Coinbase—led investors, including those on Coinbase’s platform, to reasonably expect profits from the issuers’ efforts.” It also described as “unsupported and nonsensical” Coinbase’s view that crypto asset sales on secondary market platforms are not investment contracts.
“It’s more of the same old,” Coinbase’s Chief Legal Officer, Paul Grewal, said commenting on the SEC’s latest arguments. In a post on X, formerly Twitter, he indicated that the company would file a response later in October, reiterating the exchange’s stance that it’s not offering securities and again calling for new crypto-specific regulations from the SEC.
The @SECgov just filed its opposition to our motion to dismiss their case against @Coinbase. It’s more of the same old same old. But don’t just take my word for it – take a look for yourself. 1/7 https://t.co/QMdkRoiq0V
— paulgrewal.eth (@iampaulgrewal) October 3, 2023
Many in the industry and beyond expect the lawsuit to clarify whether the SEC’s jurisdiction extends to crypto assets. Under its current Chair, Gary Gensler, the Commission has insisted that most digital tokens are subject to its rules and that trading platforms should be registered with it. Other cases of public interest include that against Ripple which recently scored a point in its legal battle with the SEC.
Do you think the court will accept the SEC’s new arguments against Coinbase’s attempt to have the lawsuit dismissed? Share your thoughts on the case in the comments section below.