Coinbase plans Friday filing to seek dismissal of SEC's case "in its entirety"
Coinbase is set to file a motion to dismiss the Securities and Exchange Commission's lawsuit against it on Friday. The exchange has confidence in its arguments and expects to win the case. Coinbase wants to work with regulators to obtain "regulatory clarity" and has argued that the SEC is pursuing a "regulation by enforcement approach." The SEC charged Coinbase in June for several violations, including not registering as an exchange and for the unregistered sale of securities. SEC Chair Gary Gensler has urged crypto platforms to register with the agency.
Coinbase Reports Q2 Earnings, Beats Market Estimates with $707.9 Million in Revenues
Coinbase, the second largest crypto exchange by trading volume, announced its Q2 earnings, which beat market estimates. The company generated total revenues of $707.9 million, had a net loss of $97 million, and a positive adjusted EBITDA of $194 million during the quarter. Despite a decrease in revenue from the previous quarter and year-ago quarter, the company's quarterly recurring operating expenses have dropped nearly 50% Y/Y. Following the announcement, Coinbase's stock rose 7% in after-hours trading but retracted 2% at the time of publication.
Coinbase's Base Blockchain to Launch Publicly on August 9th
Coinbase, the largest publicly-traded US cryptocurrency exchange, has announced that its layer-2 blockchain, Base, built with Optimism's OP Stack, will be available to the general public from August 9. The blockchain has been available to developers since July for testing applications on the new network. The announcement comes ahead of Coinbase's Q2 earnings report and the start of "Onchain Summer," a series of events inviting creators and developers to explore the possibilities of art and application development on Base.
Coinbase to Launch Ethereum Bridge and NFT Minting for Layer 2 Network Base
Coinbase has announced the release of an Ethereum bridge and NFT minting for its layer 2 network Base, which is set to launch its mainnet on August 9. The Ethereum bridge will allow Base users to transfer tokens including ETH between Coinbase’s network and Ethereum’s blockchain. Users will also be able to mint NFTs on Base and claim digital ID or crypto usernames on Coinbase Wallet. However, the announcement follows a rug pull incident involving a memecoin called BALD, which caused several memecoins to rug and decentralized exchange LeetSwap to pause operations after multiple exploits on liquidity pools.
Coinbase's Q2 earnings report shows shift in revenue streams towards interest income from USDC stablecoin issuer Circle
Coinbase's Q2 earnings report may show a change in revenue sources, as interest income from its partnership with Circle's USDC stablecoin could surpass transaction fees as its top earner. In Q1 2021, transaction fees made up 86% of Coinbase's revenue, but only 46% in Q1 2022, with subscriptions and services taking a larger share. This shift is attributed to falling digital asset prices and rising interest rates, which have boosted Coinbase's interest income from USDC reserves. However, the decline in USDC's market cap may offset these gains. Experts suggest that the increase in rates may balance out the decrease in USDC, but it is uncertain how much of it is due to Coinbase and Circle. Additionally, Coinbase may regain transaction revenue if there is a surge in interest and they remain the preferred platform for new users and institutions.
Coinbase earnings expected to be strong, but risks remain
Analysts predict that Coinbase's earnings report for Q2 will exceed expectations due to strong retail trading activity on the exchange. However, there are concerns that revenue from the USDC stablecoin could decline and the SEC's lawsuit against Coinbase could negatively impact trading volumes. FactSet consensus estimates suggest a decrease in revenue to $629 million and a slowdown in trading volume to $114 billion. Despite the potential risks, Barclays analysts expect adjusted EBITDA to surpass consensus. The recent rally in Coinbase's shares is attributed to a court ruling on Ripple's XRP tokens and the potential for financial institutions to apply for spot bitcoin ETFs. However, Berenberg analyst Mark Palmer warns that the rally may be short-lived and highlights the risks associated with the USDC stablecoin and Coinbase's trading volume.
Coinbase Co-founder Brian Armstrong Announces Intent to Incorporate Lightning Network into Platform
Brian Armstrong, co-founder of Coinbase, has expressed his support for Bitcoin's progress and announced plans to incorporate Lightning into their platform. He refuted claims that Coinbase has ignored Bitcoin, stating that they have onboarded more people to Bitcoin than any other company. Armstrong's comments come amid criticism of Coinbase's alleged neglect of Bitcoin and its Layer 2 technology, Lightning Network, which promises faster and cheaper transactions. Former Twitter CEO Jack Dorsey responded to Armstrong's announcement, initially questioning Coinbase's focus on Bitcoin and Lightning, but later expressing willingness to collaborate. Dorsey reiterated the importance of an open protocol for money transmission, aligning with the philosophy of cryptocurrencies like Bitcoin.
Brian Armstrong And Jack Dorsey Discuss Bitcoin's Lightning Network Potential
Coinbase CEO Brian Armstrong and former Twitter CEO Jack Dorsey recently had a friendly conversation on Twitter about the potential and future of Bitcoin and its Layer-2 solution, the Lightning Network. The conversation highlights the growing interest in Layer-2 solutions for Bitcoin. Dorsey suggested that Coinbase should allocate more resources towards Bitcoin and Layer-2 technologies and promoted the concept of an open protocol for monetary transmission. The Lightning Network is a Layer-2 solution that addresses scalability concerns with Bitcoin by processing transactions outside of the main Bitcoin network, making transactions almost instant and essentially free.
Bitcoin price drops below $29,000 after judge casts doubt on Ripple ruling
Bitcoin's price drop to a six-week low caused a decline in crypto stocks on Tuesday. This followed a federal judge's criticism of a split-decision in the ongoing SEC lawsuit against Ripple Labs. Bitcoin's market capitalization fell 1.8% to $28,790, with Coinbase shares declining 7.4%. On-chain metrics for bitcoin are still bullish, according to Bitfinex analysts, despite the recent decline. Other tokens, including Curve Finance's CRV, also experienced drops amid concerns about a $168 million lending position held by Curve founder Michael Egorov.
New US Defense Bill Could Pose Compliance Challenges for Stablecoin Issuers and Impact Coinbase Revenue
Stablecoins, including Circle's USD Coin (USDC), may face difficulties complying with new KYC and anti-money laundering measures if a recent amendment to the 2024 National Defense Authorization Act (NDAA) is passed. The amendment would require the US Treasury Secretary to establish examination standards for crypto assets to ensure compliance with money laundering and sanctions laws.
