Wednesday, October 8, 2025

Latest

Coinbase: Investors Shrug Off Wells Notice

Coinbase Global, Inc. (NASDAQ: COIN) investors have been little fazed by the SEC’s decision to send the company a dreaded Wells Notice. This action, which means the SEC enforcement staff intends to recommend to the SEC commissioners they should charge the company with U.S. securities law violations, related to assets listed and traded on Coinbase’s platform and Coinbase’s staking and wallet services.

To be sure, Coinbase stock has declined 12% since the company disclosed the SEC’s action after the regular market close on March 22, but the shares have still nearly doubled since year-end 2022. Coinbase’s enterprise value is around US$16 billion.

The stakes for Coinbase are enormous. The SEC may determine that altcoins, or alternative digital currencies to Bitcoin like Ethereum, Ripple, Tether, or Bitcoin Cash, may require formal SEC registration as securities in order to be traded. If the SEC were to deny those applications, Coinbase’s revenue power would be significantly impacted.

As has been its pattern, Coinbase has maintained a combative tone against the SEC in its public release and Twitter comments after receipt of the Wells Notice. One of Coinbase’s main points is that when the SEC approved its own registration statement approving the issuance of stock to investors, that was tantamount to the regulatory body’s approving its business lines.

More correctly, the SEC reviews a company’s registration filing only to ensure the regulatory body’s disclosure rules are satisfied, the most important of which is that all material, relevant information has been disclosed. The SEC’s determining a registration statement is effective is not an endorsement of a company’s products. For example, the SEC’s approving a software company’s S-1 filing for an initial public offering does not mean the software created by that company is useful.

A concerning precedent for Coinbase is the SEC’s March 2022 case filed against LBRY, Inc., a software firm that issued crypto asset securities called “LBRY Credits.” LBRY did not register the credits as a security, saying they were simply a digital currency. In November 2022, a federal judge granted the SEC’s motion for a summary judgment against LBRY.

Coinbase’s financials cannot be considered a positive. Despite posting a slight uptick in sequential revenue in 4Q 2022, Coinbase’s adjusted EBITDA loss widened to US$124 million from negative US$116 million in 3Q 2022. The company’s full-year 2022 EBITDA loss was US$371 million.

Not surprisingly, Coinbase’s cash holdings eroded quite rapidly over the course of 2022. At year-end 2022, the company’s cash totaled US$4.4 billion, down from US$7.1 billion as of December 31, 2021.

COINBASE GLOBAL, INC.

(in millions of US dollars, except otherwise noted)1Q 2023E4Q 20223Q 20222Q 20221Q 2022
Transaction Revenue$322$366$655$1,013
Blockchain Rewards$62$63$68$82
Custodial Fee Revenue$11$15$22$32
Interest Income$182$102$33$11
Other Subscription and Services Revenue$27$31$24$28
     Total Subscription/Services Revenue$300 to $325$283$211$147$152
Net Revenue$605$576$803$1,165
Transaction Expenses as % of Net Revenue~15%14%18%21%24%
Sales & Marketing Expenses as % of Net Revenue 15%13%18%17%
Technology and Development Plus G&A Expenses~$650$968$896$1,079$984
Adjusted EBITDA($124)($116)($151)$20 
Net Income – Recurring($557)($545)($647)($430)
Cash, Including Digital Assets$4,425 $5,007 $5,682 $6,116 
Debt – Period End$3,469 $3,474 $3,483 $3,486 
Shares Outstanding (millions) 261.9261.9261.9261.9

Coinbase’s 3.375% bond which matures in 2028 has rallied this year, but at a much more tempered pace than Coinbase stock. The bond last traded well below par at 56.20, equivalent to a 16.1% yield. Coinbase’s fixed income investors seem to be much more skeptical than equity investors.

Coinbase Global, Inc. last traded at US$67.83 on the NASDAQ.


Information for this briefing was found via Edgar, the SEC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Fortune Bay: The Potential Billion Dollar Project

Japan Gold Enters New Chapter as Barrick Alliance Concludes – John Proust

Barrick Mining’s “Company Defining [Gold] Discovery”

Recommended

Nord Precious Metals Produces High Grade Silver Concentrate From Tailings

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Related News

Coinbase’s Bonds Are Trading at a 12.8% Yield, A Bad Sign for the Stock

It has often been said that the bond market sniffs out market inflection points quicker...

Wednesday, December 14, 2022, 06:04:12 AM

Coinbase: Investors Shrug Off SEC Risk Amid Crypto Crackdown

Coinbase Global, Inc. (NASDAQ: COIN) has been one of the best performers in the market’s...

Monday, January 16, 2023, 06:34:00 AM

Coinbase Made History With America’s First-Ever Cryptocurrency Insider Trading Scheme

A former employee of Coinbase Global (Nasdaq: COIN) has been indicted by the United States Attorney’s office...

Friday, July 22, 2022, 02:46:00 PM

Coinbase Halts NFT Transfers on iOS Wallets, Blames Apple’s 30% App Tax

Coinbase (NASDAQ: COIN) said it has halted all NFT transfers for customers using its iOS...

Friday, December 2, 2022, 07:29:00 AM

Coinbase Sent Plummeting After Disappointing Third Quarter Earnings

Shares of Coinbase Global (NASDAQ: COIN) were sent in a downward spiral in after-hours trading...

Wednesday, November 10, 2021, 10:08:00 AM