Cryptocurrency exchange Coinbase reported net income of $605 million in the fourth quarter of 2022, according to its latest earnings report released after the bell on Tuesday.
Since its launch, COIN shares briefly rose 3% to $64 before falling back to $62 in after-hours trading.
Coinbase survives the bear
The latest figures from the stock are up 5% from the previous quarter’s $576 million figure and slightly above analyst estimates of $588 million.
According to the company presentation, more than half of that revenue ($322 million) was generated from transactions, while the rest came from subscriptions and services ($283 million). The former was up 12% from the previous quarter, while the latter was up 38%.
However, on an annualized basis, net revenue fell from $7.4 billion in 2021 to $3.1 billion in 2022, a reflection of slowing activity across the industry.
“Idiosyncratic events throughout 2022 exacerbated already weak macro conditions,” the company wrote. “However, Coinbase and the crypto economy have proven resilient and long-term fundamentals remain strong.”
Coinbase’s total operating expenses are up 3% from the third quarter, a number that would have been down 1% were it not for the exchange’s $50 million NYDFS. settlement in early January. The department accused Coinbase of failing to perform necessary background checks on its customers, exposing the company to criminal activity, including possible money laundering and suspected child trafficking.
However, the company has taken other steps to keep expenses down in the first quarter of 2023, including a 20% staff reduction and other cost management efforts. By the end of the quarter, it expects a 25% cost reduction over Q4 2022 when excluding the NYDFS deal.
regulation is coming
The report also noted that 2023 is likely to be a “significant year for crypto policy in the United States and abroad.” The conversation on the subject has gained more attention following the FTX crash last year, prompting regulators to take action that Coinbase does not like.
“Coinbase is concerned about actions that seem more designed to be punitive and reactive than to address the real interests of consumers and the reality of how crypto works,” the company said.
Coinbase CEO Brian Armstrong has spoken out against the recent SEC crackdown on the Kraken staking service, which he believes did not violate securities laws. His company also denied that stablecoins like BUSD constitute securities after the SEC issued a notice from Wells to the issuer of the asset. paxosclaiming so much
Binance Free $100 (Exclusive) – Use this link to sign up to receive $100 free and 10% off your first month’s fees for Binance Futures (terms).
PrimeXBT Special Offer – Use this link to sign up and enter the code POTATO50 to receive up to $7,000 on your deposits.
