[10-K] Coinbase Global, Inc. Files Annual Report
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
Coinbase Global, Inc. files its annual report describing a fast‑growing, highly regulated crypto and trading platform. The company now positions itself as an “Everything Exchange,” adding stocks, commodity futures, perpetual futures, and prediction markets alongside crypto for consumers, institutions, and developers.
Revenue is still heavily tied to crypto prices, trading volumes, and activity in Bitcoin, Ethereum, and payment stablecoins such as USDC. Coinbase highlights large on‑platform staking balances, its Base L2 blockchain, and a multi‑year economic sharing agreement with Circle for USDC. The filing also details extensive regulatory exposure, cybersecurity and custody risks, competitive pressures, and dependence on U.S. and global licensing, anti‑money‑laundering compliance, and evolving securities and derivatives rules.
Positive
- None.
Negative
- None.
Insights
Coinbase doubles down on diversification but remains tied to crypto cycles and regulation.
Coinbase outlines a broadened model as an “Everything Exchange,” adding stocks, futures, options access and prediction markets to its core crypto offering. It also emphasizes subscription and services lines such as stablecoin economics, staking commissions, custody, financing, and Coinbase One memberships.
The report confirms that Bitcoin, Ethereum and payment stablecoins still drive a meaningful share of trading and subscription revenue, leaving results sensitive to crypto prices and volumes. Management also discloses large staking balances on behalf of retail and institutional clients, which support fee income but introduce protocol and regulatory risk.
Regulatory discussion is extensive: Coinbase operates under multiple U.S. and international licenses, and acknowledges ongoing uncertainty around asset classification, derivatives, AML, sanctions, consumer protection and unclaimed‑property treatment of crypto. The investment case continues to hinge on crypto market health, regulatory outcomes and execution of its diversification strategy rather than any single new data point in this filing.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from to | |||||
Commission file number 001-40289
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Address of principal executive offices)1 | (Zip Code) | (I.R.S. Employer Identification No.) | ||||||||
Not Applicable
(Registrant's telephone number, including area code)1
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| | ||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Non-accelerated filer ☐ Accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant on June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, was $74.2 billion based on the closing sales price of the registrant’s Class A common stock as reported on Nasdaq Global Select Market on that date.
As of February 5, 2026, the number of shares of the registrant's Class A common stock outstanding was 223,041,278 and the number of shares of the registrant's Class B common stock outstanding was 41,033,891 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for its 2026 Annual Meeting of Shareholders, or Proxy Statement, to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference in Part III. Except with respect to information specifically incorporated by reference in this Annual Report, the Proxy Statement shall not be deemed to be filed as part hereof.
1 We are a remote-first company. Accordingly, we do not maintain a headquarters. We are including this address solely for the purpose of satisfying the Securities and Exchange Commission’s request. Shareholder communications may also be sent to the email address: secretary@coinbase.com.
Table of Contents
TABLE OF CONTENTS
| Page | |||||
Part I | 7 | ||||
Item 1. Business | 7 | ||||
Item 1A. Risk Factors | 21 | ||||
Item 1B. Unresolved Staff Comments | 84 | ||||
Item 1C. Cybersecurity | 84 | ||||
Item 2. Properties | 85 | ||||
Item 3. Legal Proceedings | 86 | ||||
Item 4. Mine Safety Disclosures | 86 | ||||
Part II | 86 | ||||
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 86 | ||||
Item 6. [Reserved] | 88 | ||||
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 89 | ||||
Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 105 | ||||
Item 8. Financial Statements and Supplementary Data | 111 | ||||
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures | 167 | ||||
Item 9A. Controls and Procedures | 167 | ||||
Item 9B. Other Information | 168 | ||||
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 169 | ||||
Part III | 169 | ||||
Item 10. Directors, Executive Officers and Corporate Governance | 169 | ||||
Item 11. Executive Compensation | 169 | ||||
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 169 | ||||
Item 13. Certain Relationships and Related Transactions, and Director Independence | 169 | ||||
Item 14. Principal Accountant Fees and Services | 169 | ||||
Part IV | 170 | ||||
Item 15. Exhibits and Financial Statement Schedules | 170 | ||||
Item 16. Form 10-K Summary | 173 | ||||
Signatures | 174 | ||||
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Glossary
Throughout this Annual Report on Form 10-K, we use a number of industry terms and concepts which are defined as follows:
•Address: An alphanumeric reference to where crypto assets can be sent or stored.
•Bitcoin: The first peer-to-peer electronic cash system of global, decentralized, scarce, digital money as initially introduced in a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto.
•Block: A structured batch of transactions, analogous to a digital page in a ledger. Blocks that are added to an existing blockchain as transactions are processed and ordered by network. For example, depending on the blockchain, blocks may be produced by miners, validators, or sequencers.
•Blockchain: A cryptographically secure digital ledger that maintains a record of all transactions that occur on the network and follows a consensus protocol for confirming new blocks to be added to the blockchain.
•Cold storage: The storage of private keys in any fashion that is disconnected from the internet. Common cold storage examples include offline computers, USB drives, or paper records.
•Crypto: A broad term for any cryptography-based market, system, application, or decentralized network.
•Crypto asset or token: Any digital asset built using blockchain technology, including cryptocurrencies, stablecoins, and security tokens.
•Cryptocurrency: Bitcoin and alternative coins, or “altcoins,” launched after the success of Bitcoin. This category of crypto asset is designed to work as a medium of exchange, store of value, or to power applications and excludes security tokens.
•Decentralized applications: Applications that run on a decentralized network, typically using blockchain technology.
•DeFi: Short for Decentralized Finance. Peer-to-peer software-based network of protocols that can be used to facilitate traditional financial services like borrowing, lending, trading derivatives, insurance, and more through smart contracts.
•Ethereum: A decentralized global computing platform that supports smart contract transactions and peer-to-peer applications.
•Fork: A fundamental change to the software underlying a blockchain which results in two different blockchains, the original, and the new version. In some instances, the fork results in the creation of a new token.
•Hot wallet: A wallet that is connected to the internet, enabling it to broadcast transactions.
•Layer 1 (L1) Blockchain: The foundational blockchain that provides essential services like recording transactions and ensuring security.
•Layer 2 (L2) Blockchain: This refers to network protocols layered on top of a L1 Blockchain. L2 Blockchains utilize the infrastructure of L1 Blockchains but offer greater flexibility in scaling, transaction processing and improving overall network throughput.
•Miner: Individuals or entities who operate a computer or group of computers that add new transactions to blocks and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new tokens for their services.
•Mining: The process by which new blocks are created, and thus new transactions are added to the blockchain.
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•Network: The collection of all nodes that use computing power to maintain the ledger and add new blocks to the blockchain. Most networks are decentralized, reducing the risk of a single point of failure.
•Node: A computer or group of computers that supports the operations of a blockchain network, by validating blocks, executing smart contracts, or storing copies of the blockchain available for other nodes in the network to establish consensus.
•Onchain: Onchain typically refers to activities or processes that occur directly on a blockchain. It involves transactions, smart contracts, or any other operations that are recorded and executed within the blockchain network itself, as opposed to offchain activities that might occur outside the blockchain system.
•Onchain economy: A new open financial system built onchain.
•Protocol: A type of algorithm or software that governs how a blockchain operates.
•Public key or private key: Each public address has a corresponding public key and private key that are cryptographically generated. A private key allows the recipient to access any funds belonging to the address, similar to a bank account password. A public key helps validate transactions that are broadcasted to and from the address. Addresses are shortened versions of public keys, which are derived from private keys.
•Security token: A crypto asset that is a security under the U.S. federal securities laws. This includes digital forms of traditional equity or fixed income securities, or may be assets deemed to be a security based on their characterization as an investment contract or note.
•Self-custodial wallet: A self-custodial wallet, also known as a self-hosted wallet, is a type of cryptocurrency wallet where the user holds the private keys, instead of a third-party.
•Smart contract: Software that digitally facilitates or enforces a rules-based agreement or terms between transacting parties.
•Stablecoin: Crypto assets designed to minimize price volatility. A stablecoin is designed to track the price of an underlying asset such as fiat money or an exchange-traded commodity (such as precious metals or industrial metals), while other stablecoins utilize algorithms that are designed to maintain a relative stable price of the asset. Stablecoins can be backed by fiat money, physical commodities or other crypto assets.
•Staking: An energy efficient equivalent of mining. Stakers use their tokens to validate transactions and create blocks. In exchange for this service, stakers earn a reward.
•Supported crypto assets: The crypto assets we support for trading and custody on our platform, which include crypto assets for trading and crypto assets under custody.
For additional information regarding our key business metrics, which include Monthly Transacting Users, Assets on Platform, Trading Volume, and Net Income as well as our use of Adjusted EBITDA, a non-GAAP financial measure, see the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measure” in Part II, Item 7 of this Annual Report on Form 10-K.
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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. All statements contained in this Annual Report on Form 10-K other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” or the negative of these terms or other similar expressions.
Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:
•our future financial performance, including our expectations regarding our net revenue, operating expenses, and our ability to achieve and maintain future profitability;
•our business plan and our ability to effectively manage any growth;
•anticipated trends, growth rates, and challenges in our business, the onchain economy, the price, and market capitalization of crypto assets and in the markets in which we operate;
•market acceptance of our products and services;
•beliefs and objectives for future operations;
•our ability to maintain, expand, and further penetrate our existing customer base;
•our ability to develop new products and services and grow our business in response to changing technologies, customer demand, and competitive pressures;
•our expectations concerning relationships with third parties;
•our ability to maintain, protect, and enhance our intellectual property;
•our ability to continue to expand internationally;
•the effects of increased competition in our markets and our ability to compete effectively;
•future acquisitions of or investments in complementary companies, products, services, or technologies and our ability to successfully integrate such companies or assets;
•our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally given the highly evolving and uncertain regulatory landscape;
•general macroeconomic conditions, including interest rates, inflation, changes in tariffs and trade restrictions, instability in the global banking system, economic downturns, and other global events, including regional wars and conflicts and government shutdowns;
•economic and industry trends, projected growth, or trend analysis;
•trends in revenue;
•trends in operating expenses, including technology and development expenses, sales and marketing expenses, and general and administrative expenses, as well as certain variable expenses, and expectations regarding these expenses as a percentage of revenue;
•our key business metrics used to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions;
•the expected benefits and impacts of our acquisition of Sentillia B.V.;
•our plans with respect to the Repurchase Program; and
•other statements regarding our future operations, financial condition, and prospects and business strategies.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.
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You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report on Form 10-K on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and elsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Annual Report on Form 10-K. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements.
Neither we nor any other person assume responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Annual Report on Form 10-K to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
RISK FACTORS SUMMARY
Consistent with the foregoing, our business is subject to a number of risks and uncertainties, including those risks discussed at length below. These risks include, among others, the following, which we consider our most material risks:
•Our operating results have and will significantly fluctuate, including due to the highly volatile nature of crypto;
•Our total revenue is substantially dependent on the prices of crypto assets and volume of transactions conducted on our platform. If such price or volume declines, our business, operating results, and financial condition would be adversely affected and the price of our Class A common stock could decline;
•Our net revenue may be concentrated in a limited number of areas. Within transaction revenue and subscription and services revenue, a meaningful concentration is from transactions in Bitcoin and Ethereum and stablecoin revenue in connection with USDC, respectively. If revenue from these areas declines and is not replaced by new demand for crypto assets or other products and services, our business, operating results, and financial condition could be adversely affected;
•We have in the past, and may in the future, enter into partnerships, collaborations, joint ventures, or strategic alliances with third parties. If we are unsuccessful in establishing or maintaining strategic relationships with these third parties or if these third parties fail to deliver certain operational services, our business, operating results, and financial condition could be adversely affected;
•Interest rate fluctuations could negatively impact us;
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•Adverse economic conditions could adversely affect our business;
•The future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate. If crypto does not grow as we expect, our business, operating results, and financial condition could be adversely affected;
•Cyberattacks and security breaches of our platform, or those impacting our customers or third parties, could adversely affect our brand, reputation, business, operating results, and financial condition;
•We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition;
•We operate in a highly competitive industry and our business, operating results, and financial condition could be adversely affected if we are unable to compete effectively;
•We compete against a growing number of decentralized and noncustodial platforms and our business, operating results, and financial condition could be adversely affected if we fail to compete effectively;
•As we continue to expand and localize our international activities, our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering;
•We are, and may continue to be, subject to litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could adversely affect our business, operating results, and financial condition;
•If we cannot keep pace with rapid industry changes to provide new and innovative products and services, the use of our products and services, and consequently our net revenue, could decline, which could adversely affect our business, operating results, and financial condition;
•A particular crypto asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which could adversely affect our business, operating results, and financial condition;
•We currently rely on third-party service providers for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our customers;
•Loss of a critical financial institution or insurance relationship could adversely affect our business, operating results, and financial condition;
•Any significant disruption in our products and services, in our information technology systems, or in any of the blockchain networks we support, could result in a loss of customers or funds and adversely affect our brand, reputation, business, operating results, and financial condition;
•Our failure to securely store and manage our and our customers’ fiat currencies and crypto assets could adversely affect our business, operating results, and financial condition; and
•The theft, loss, or destruction of private keys required to access any crypto assets held in custody for our own account or for our customers may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any crypto assets, it could cause regulatory scrutiny, reputational harm, and other losses.
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PART I
ITEM 1. BUSINESS
Coinbase Overview
Our mission is to increase economic freedom in the world.
We are working to update the century-old financial system by providing a trusted platform that makes it easy for our customers to engage with crypto assets. In December 2025, we took a major step forward to becoming the Everything Exchange—dramatically expanding the assets available to trade on Coinbase, including stocks, commodity futures, perpetual futures, and prediction markets. Our goal is to create a comprehensive, seamless experience for retail users, institutions, and developers to engage in the future of finance.
We differentiate ourselves from our competition with:
•Trust: We are deeply invested in building the most secure and compliant platform. We hold customer assets one-to-one at all times.
•Ease of use: We build easy-to-use products that our customers love. We obsess over quality and craft. We strive to make financial transactions easy.
Our Business
We offer products primarily to three customer groups:
•Consumers: Retail customers seeking to hold, invest or trade crypto assets, as well as a growing set of trading offerings such as equities, prediction markets, and derivatives. Consumers use Coinbase as a primary account for crypto-enabled financial services, and to engage onchain.
•Institutions: Businesses including market makers, asset managers, hedge funds, banks, wealth platforms, registered investment advisors, payment platforms, and public and private corporations. These customers use our products to custody and trade crypto or crypto derivatives.
•Developers: Businesses, including technology companies, financial institutions (such as banks, fintechs, and retail brokers), and payment firms. These customers leverage the Base Chain and Coinbase Developer Platform to build, and scale crypto-enabled products.
Our platform serves as a secure and compliant on-ramp to the onchain economy and enables our customers to use their crypto assets in both first and third-party product experiences. Our business consists of products that we monetize through transaction fees, such as our consumer trading product suite, as well as subscription products, such as our stablecoin products. We describe these products below. Throughout this Annual Report on Form 10-K, we will refer to our full suite of products and offerings as our platform or platforms.
Transaction products
Consumer trading
Our platform is designed to serve a wide variety of consumers, whether they are buying their first crypto asset or are advanced traders. In 2025, we expanded our trading products beyond spot crypto as we built out the Everything Exchange. We now offer stocks, commodity futures, perpetual futures, and prediction markets. Our vision for the Everything Exchange is to offer a single platform to trade any asset, anywhere in the world. We offer our trading products through two trading experiences:
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•Simple trade: Our Simple trading experience offers customers the ability to buy and sell crypto assets, stocks, futures, and prediction markets using the basic interface of our platform. Simple trading focuses on consumers of all experience levels who are prioritizing ease of use.
•Advanced trade: Our Advanced trading experience offers traders access to spot and derivatives order books, real-time market information through interactive charts, a live trade history on the Advanced trade view, and other trading tools. Advanced trading focuses on sophisticated traders who are prioritizing a robust set of features to meet their more complex needs and higher volume.
We charge fees from consumers trading on our platform, including through volume-based transaction fees and a spread depending on the type of trade. Simple trading and Advanced trading fees differ due to both the typical nature of the transactions and unique benefits of each offering. Generally, Simple trading fees are higher than those on Advanced trading.
Institutional Trading and Markets
We service institutional customers via Coinbase Prime, which is our full-service prime brokerage platform where our institutional customers can access deep pools of liquidity across a network of trading venues. We offer volume-based pricing and charge a transaction fee for executed trades.
We also provide market infrastructure in the form of exchanges for customers to trade spot and derivatives. We currently operate four exchanges: the Coinbase Exchange, the Coinbase International Exchange, the Coinbase Derivatives Exchange, and the Deribit Exchange. These exchanges charge a volume-based transaction fee for executed trades.
Exchanges | Products | Assets(1) | ||||||
Coinbase Exchange | Spot trading | 360+ crypto assets | ||||||
Coinbase International Exchange | Perpetual futures, Spot | 200+ crypto assets | ||||||
Coinbase Derivatives Exchange | Dated futures, Perpetual-style futures | 35+ futures (crypto, commodities, equity indices) | ||||||
| Deribit | Options, Perpetual futures, Dated futures, Spot | 15+ crypto assets | ||||||
(1)Figures are reported as of the filing date of this Annual Report on Form 10-K.
Deribit is the global leader in crypto options trading by volume and open interest. Deribit accelerates both our international expansion ambitions and our derivatives offerings.
Other transaction products
•Base: Base is a decentralized L2 Ethereum blockchain offering fast, low-cost, global onchain transactions. Base has processed billions of transactions since launch and supports an expanding ecosystem of onchain applications across capital markets, trading, payments, and more. Our goal for Base is to bring one million developers and one billion users onchain to build a global economy. Coinbase generates revenue from sequencer fees paid each time a transaction is processed on the Base blockchain.
•Base App (formerly Coinbase Wallet): The Base App is a self-custodial wallet product. It is the evolution of our prior Coinbase Wallet offering, which we offer globally, subject to applicable laws and app availability. The Base App integrates trading, payments, a social feed, and access to decentralized applications. Built on open protocols, users maintain ownership of their identity, assets, and social connections across the onchain ecosystem. Base App users have sole control over the cryptographic keys to access their assets, which are stored directly on their mobile devices or personal storage accounts and not with a centralized entity. Coinbase is unable by default to assist in recovery if a user loses access to their wallet, because the cryptographic key
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is unilaterally controlled by the user. Users do, however, have an option in the Base App to add a recovery signer that would allow them to recover access.
Subscription products and other services
Stablecoins
Stablecoins play a key role in updating the financial system and advancing economic freedom by combining the benefits of crypto rails, which are global, cheap, and fast, with an asset that is stable relative to fiat currencies. We offer a variety of stablecoins denominated in multiple fiat currencies on our platform, and we continue to explore partnerships with a number of stablecoin issuers to expand our offerings.
In 2018, we partnered with Circle Internet Financial, LLC (“Circle”) to launch USDC, with the goal of driving global, mainstream adoption of stablecoins. Circle and its affiliate, Circle Internet Financial Europe SAS, are the issuers of USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars, and Circle Internet Financial Europe SAS is the issuer of EURC, a stablecoin redeemable on a one-to-one basis for Euros. In August 2023, we entered into an updated arrangement with Circle to (i) support USDC; (ii) help drive long-term success of the stablecoin ecosystem; and (iii) share in the economics of the reserves backing stablecoins in circulation both on and off our platform (the “Circle Agreement”). Pursuant to the Circle Agreement, Circle is the issuer of USDC, holds the relevant trademarks which we can use, and pays us for our role in the growth of USDC: the greater the proportion of USDC in circulation generally and on our platform, the greater our revenue generated under the Circle Agreement.
The Circle Agreement has an initial three-year term. Upon completion of the initial term, we and Circle will discuss in good faith whether any modifications to the Circle Agreement are warranted. If such modifications are not agreed upon, the Circle Agreement will automatically renew for additional three-year terms unless we or Circle fail to meet the conditions specified in the Circle Agreement. These conditions are the satisfaction of a Product Threshold, a Company Threshold, and a Reseller Threshold (as defined in the Circle Agreement). If the conditions are satisfied, the Circle Agreement cannot be terminated.
Separate from any renewal, there are certain circumstances under which the parties could initiate a restructuring of the agreement. In such an event, if an amendment or restructuring is not possible or Circle does not make payments to us following such a restructuring period, we can require the assignment of certain trademarks by Circle to us, which would then impact the arrangement between the parties and Circle’s ability to issue other U.S. dollar-denominated stablecoins.
We and Circle may, from time to time, enter into arrangements with third parties approved by both us and Circle (such third parties, “approved participants”) that provide for fees to be paid to such approved participants to increase the circulation of stablecoins subject to the Circle Agreement. In anticipation of such arrangements, in November 2024, we and Circle entered into a supplement to the Circle Agreement, pursuant to which we and Circle will agree upon the fees that such third parties are eligible to receive and the undertakings to be required of them upon becoming an approved participant. We have filed a copy of the Circle Agreement and its 2024 supplement as exhibits to this Annual Report on Form 10-K in order to provide investors with additional information about this partnership.
Historically, we have observed that customers holding USDC on our platform are more likely to use our other products, such as trading. Therefore, where permitted, we pay rewards to both Coinbase One subscribers as well as institutional customers who hold USDC to incentivize on-platform use and deeper engagement with our product suite.
Blockchain Rewards
Certain blockchain protocols, such as Ethereum and Solana, rely on staking to validate blockchain transactions, an essential operation to these protocols’ operations and an alternative consensus
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mechanism to mining. Network participants can designate a certain amount of their crypto assets on the network to validate transactions and earn rewards. Today, many users choose to outsource the technical processes involved in staking by staking through a service provider.
We provide an onchain staking service, which allows our customers to stake their assets with a few clicks. Our customers maintain full ownership of their crypto assets while earning staking rewards. Customers who stake their assets receive rewards, paid out by applicable blockchain protocols, in the form of the network’s crypto asset. The rewards rates, expressed as an annual percentage yield, vary by asset. In return for the services we provide, we earn a fixed percentage commission on all staking rewards received.
Because staking rewards depend on the relevant protocol and network conditions, the estimated rewards rate for each asset made available for staking is displayed on our website and through our platform, and is calculated by periodically consulting onchain data to determine the total amount. We only facilitate staking of a consumer’s crypto assets in response to a direct instruction from that consumer, and the staked crypto assets remain the property of the consumer and in our custody while staked. According to certain protocol rules, staked crypto assets cannot be sold or transferred while they remain staked, and we do not use or allocate consumers’ staked crypto assets for any other purpose.
Subject to jurisdiction, we support eight staking assets through our platform for consumers as of December 31, 2025: Cardano (ADA), Avalanche (AVAX), Cosmos (ATOM), Polkadot (DOT), Ethereum (ETH), MATIC (POL), Solana (SOL), and Tezos (XTZ). As of December 31, 2025, approximately $7.5 billion worth of these assets were held on behalf of individual consumers staked through our platform, as measured in U.S. dollar equivalents.
For our institutional customers, our staking process varies by customer. In addition to operating our own validator nodes to provide staking services, we also provide institutional customers access to validator nodes operated by third-party service providers. Institutional customers receive rewards directly from the protocol. The fees we charge to institutional customers depend on the customer agreement and the selected service. As of December 31, 2025, over $15.2 billion worth of assets were staked by institutional customers through Coinbase Prime, as adjusted to USD.
We also operate a cbETH token wrapping service. cbETH is an Ethereum-based “wrapped staking token” that represents ownership of ETH staked through our platform. Eligible customers can obtain cbETH tokens by wrapping their staked ETH or by purchasing cbETH tokens on our exchange or on third-party exchanges. A cbETH holder can sell or transfer their cbETH within the Coinbase app or send cbETH to a self-custodial wallet or to other addresses on the Ethereum blockchain. Selling or otherwise transferring cbETH automatically transfers ownership of the underlying staked ETH, along with any rewards earned.
There are risks associated with our staking services, which are described in the risk factor in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K: “We may suffer losses due to staking, delegating, and other related services we provide to our customers.”
Institutional financing
Financing is an increasingly important offering to our institutional customers. We offer integrated financing products and services to institutional customers that meet our credit criteria to access liquidity for their hedging, trading, and working capital needs. Our lending product set includes tools to allow clients to trade in real time, products that enable leverage and ability to short sell across our Prime and Markets offerings, and structured loans supporting client working capital and other needs.
In addition to lending, we borrow fiat, crypto assets, and stablecoins from third parties, including eligible institutional customers, to facilitate our financing products. We also offer a managed lending product for eligible institutional customers under our Agency Lending offering.
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The terms of our lending and borrowing arrangements may vary modestly from customer to customer. For additional information, see Note 5. Collateralized Arrangements and Financing of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K and Risk Factors—We provide secured loans to our customers, which exposes us to credit risks and may cause us to incur financial or reputational harm included in Part I, Item 1A of this Annual Report on Form 10-K.
Custodial Interest
We earn interest on customer custodial funds held at third-party depository institutions, which is influenced by customer funds on our platform and prevailing interest rates.
Other subscription and services products
•Custody: Through Coinbase Prime, we offer an institutional-grade custody platform with a highly secure cold storage solution both within the United States and globally. We charge institutions a separate fee based on the total assets stored in custody on our platform. For example, we serve as a custodian for several Bitcoin and Ethereum ETF issuers. We now also offer an orchestrated hot wallet custody solution, enabling faster transaction execution and enhanced liquidity while maintaining institutional-grade security. We do not charge our consumers a separate fee to securely store their crypto assets on our platform.
•Coinbase One: Coinbase One is a consumer subscription product for which consumers pay a monthly or annual fee to unlock a variety of benefits, including limited reduced transaction fee trading, USDC rewards, higher staking rewards than non-Coinbase One subscribers, priority customer service support, and offers from third-party partners. In 2025, we launched an additional subscription tier, Coinbase One Basic, offering consumers essential benefits for a lower subscription fee. There are now three membership tiers under Coinbase One: Basic, Preferred, and Premium. We also launched the Coinbase One credit card in 2025, allowing users to earn up to 4% Bitcoin back on every purchase. Consumers are able to increase their rewards rate by increasing their balances held on the platform. Coinbase One serves two purposes: generating recurring subscription revenue and deepening user engagement across our product suite. We generate direct revenue from Coinbase One subscription fees. Coinbase One users engage with the rest of our product suite, generating trading revenue, staking commission, credit card interchange fees, and more.
•Coinbase developer platform: Coinbase developer platform (“CDP”) is an infrastructure solution that provides businesses of all sizes with a single entry point to build and scale crypto offerings onchain. By consolidating payments, trading, wallets, and stablecoins into a single onboarding flow and offering self-serve application programming interfaces, software development kits, and tools, CDP simplifies the integration of crypto functionality into products, enabling faster and more efficient adoption of blockchain technology.
Trusted crypto platform
Coinbase is the most trusted crypto platform.
We place great importance on securely storing crypto assets, and we have policies and procedures to help ensure the proper storing of the crypto assets we hold on behalf of our customers and for our own investment and operating purposes. When customers use our platform, their assets remain their assets.
Our products, services and educational offerings incorporate a holistic, customer-centric set of digital engagement practices, including educational content and notifications, which are designed, in part, to promote financial literacy and awareness and to provide customers with guidance and information to help them make better informed decisions. Examples of these offerings include, among others: (i) educational materials, including but not limited to an online collection of how-to guides and tutorials (ii) in-app
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engagement, including features designed to enable consumers to start small and build crypto asset holdings with confidence over time, including through rewards to customers in connection with the completion of certain milestones, (iii) sweepstakes, and (iv) differentiated marketing, including paid digital and social media marketing campaigns, as well as email campaigns, search engage optimization, in-app banners, push and pop-up notifications, paid search marketing, and affiliate marketing.
For additional information, see Risk Factors—Laws and regulations regarding conflicts of interest associated with the use of predictive data analytics, digital engagement practices, and similar technologies, if adopted and found to be applicable to our business, may require us to modify, limit, or discontinue our use of certain technologies and features contained within our products and services and may impact the way that we interact with existing and prospective customers, which could adversely affect our business, operating results, and financial condition included in Part I, Item 1A of this Annual Report on Form 10-K.
Custodial practices
We store crypto assets using proprietary technology and operational processes. Crypto assets are not insured or guaranteed by any government or government agency; however, we have worked hard to securely store our customers’ crypto assets and our own crypto assets for investment and operational purposes with legal and operational protections.
We appropriately ledger, properly segregate, and maintain separate accounts for our corporate crypto assets and customers’ crypto assets. With respect to Coinbase entities that provide cold storage custody services, such as Coinbase Custody Trust Company, LLC (“CCTC”) and Coinbase Luxembourg S.A. (which is required to hold its client assets in segregated cold storage under the Markets in Crypto Assets regulation (“MiCA”)), crypto assets are held separately in dedicated addresses and managed using a proprietary combination of software and hardware security modules. For Coinbase entities that provide crypto trading services, such as Coinbase, Inc., crypto assets are held in an omnibus manner on the blockchain and separately recorded using a ledger system. As a U.S. public company, we are required to undergo annual audits and quarterly reviews, which require that our independent registered public accounting firm reviews and audits our internal controls and reconciliation processes. Our various user, custody, and client agreements outline the applicability of Uniform Commercial Code (“UCC”) Article 8 to crypto assets under custody. UCC Article 8 provides that financial assets held in the United States by Coinbase for its customers are not property of Coinbase and not subject to claims of our general creditors.
We utilize both hot wallets and cold wallets in our custodial solutions. We actively manage wallet balances and generally seek to hold no more than 2% of assets under custody in hot wallets at any given time. Cold wallet private key materials are stored and secured at facilities within the United States and internationally. We store the substantial majority of our own crypto asset holdings utilizing the same storage solutions that we provide to our customers. In limited cases, we use storage solutions not offered to our customers to store immaterial amounts of crypto assets held for corporate purposes outside of our core custodial product offerings. Deribit and Coinbase Asset Management utilize Coinbase custody services and third parties as custodians.
A key risk mitigation measure we utilize is ensuring that wallet private keys are never stored in plaintext format in any location. The cryptographic consensus of multiple human approvers is required to decrypt a private key for both hot and cold wallets. No single individual can control or operate Coinbase’s wallet private keys. To the extent a customer withdrawal requires movement of assets from a cold wallet, authority to release proceeds from the cold wallet resides with a geographically distributed team of professionals, all of whom are subject to enhanced background checks.
We perform internal audits of the private key management process and reconciliations between Coinbase wallets and third-party blockchain data. Coinbase, Inc. and CCTC, the two subsidiaries that custody the majority of crypto assets on platform, are periodically examined by regulators, including the
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New York State Department of Financial Services (“NYDFS”) and various states in which such entities hold money transmission licenses. In the event of an insurable loss of assets for which we file a claim, we may be expected to provide insurance claim investigators access to inspect the assets under custody and supporting systems.
We do not use third-party sub-custodians, where one custodian holds assets on behalf of another custodian, for the management and storage of digital assets. In accordance with applicable state money transmitter laws, we hold U.S. customers’ USD cash at FDIC-insured depository institutions, NCUSIF-insured credit unions, and in money market funds in accounts explicitly named to further demonstrate that we are holding the funds as custodian. We believe the terms of the relevant account agreements to be comparable to those offered to similar companies.
Other policies and procedures
We also have policies in place to help us govern accounting controls, including customer account initiations and reconciliations, and to help prevent improper self-dealing and other conflicts of interest between us and our customers on our platform. When we make investments in crypto assets, we execute investment trades away from our platform to avoid any conflict of interest with our customers. Additionally, Coinbase is committed to providing a fair, transparent, and equitable experience across our suite of trading products. Crypto assets and use cases are rapidly expanding and Coinbase seeks to offer our customers secure access to all legal assets and use cases. For example, we take a number of steps to mitigate conflicts in our digital asset listing process. We review asset listing procedures with a group of senior leaders from across the company. These leaders review the relevant aspects of any asset escalated to them in connection with a listing on our platform in accordance with our digital asset support policies and procedures. We have seen an increase in the rate of assets created and increased demand for listings, and we continue to evaluate our processes to meet this increased demand.
Further, we carefully handle and keep customer data confidential through security and encryption as well as policies, training, and monitoring. Moreover, we invest heavily in compliance tools. For example, in addition to robust know-your-customer (“KYC”) and anti-money laundering programs, we employ an industry leading third-party trade surveillance software platform that helps us monitor and detect problematic trading activities on our platform, as further discussed below. We have also invested in a range of technologies that are designed to help identify and prevent harmful activity on our platform, including fraud or account takeovers.
As we maintain, grow, and expand our product and services offerings we also must scale and strengthen our internal controls and processes, and monitor our third-party partners’ and vendors’ ability to similarly scale and strengthen in order for us to remain an industry leader and a trusted platform. Additionally, we have procedures to process redemptions and withdrawals expeditiously, subject to the terms of applicable user agreements. For additional information, see Risk Factors—Our failure to securely store and manage our and our customers’ fiat currencies and crypto assets could adversely affect our business, operating results, and financial condition and Risk Factors—Depositing and withdrawing crypto assets into and from our platforms involve risks, which could result in loss of customer assets, customer disputes and other liabilities, which could adversely affect our business, operating results, and financial condition included in Part I, Item 1A of this Annual Report on Form 10-K.
Competition
The crypto industry is highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and is subject to uncertain and evolving industry and regulatory requirements. We face significant competition from a variety of companies around the world—ranging from crypto-native companies, including decentralized exchanges, to large traditional financial services incumbents and financial technology providers.
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Our main competition falls into the following categories:
•traditional financial services and financial technology companies. This includes companies that offer crypto powered products, as well as companies that only offer traditional products, such as stocks. With the expansion in our product offerings in 2025 to include stocks, prediction markets and more, our competitive set in this category has broadened;
•companies focused on the crypto asset market, some of whom adhere to local regulations and directly compete with our platform, and others that choose to operate outside of local rules and regulations or in jurisdictions with less stringent local rules and regulations and are potentially able to more quickly adapt to trends, support a greater number of crypto assets, and develop new crypto-based products and services due to a different standard of regulatory scrutiny;
•crypto-focused companies and traditional financial incumbents that offer point or siloed solutions specifically targeted at institutional customers;
•decentralized and non-custodial platforms; and
•stablecoins, other than USDC, and fiat currencies globally.
The competitive landscape varies significantly by geography, and many offerings are global in nature. The traditional financial services and financial technology companies we compete against are largely U.S.- and European-based and operate under the same evolving regulatory landscape that we do. However, we also face competition from companies, in particular those located outside the United States, who are subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Their business models rely on being unregulated or only regulated in a small number of lower compliance jurisdictions, while also offering their products in highly regulated jurisdictions, including the United States, without necessarily complying with the relevant regulatory requirements in such jurisdictions. As regulations and compliance requirements in the United States become clearer, we may face increased competition from U.S.-based companies.
We differentiate ourselves from our competition first through our focus on building easy to use products, and second through investing in our trusted brand as a compliant and secure platform. We also differentiate through rapid product innovation, and by building products that are onchain native, such as staking, access to decentralized exchanges, access to decentralized borrowing and lending markets and more. See the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for a more comprehensive description of risks related to competition.
Human Capital
Powering Coinbase is no small task, and requires hiring, developing, and retaining the most talented individuals who are deeply passionate about our mission to increase economic freedom and who are excited to build new products and services.
We work incredibly hard in pursuit of ambitious goals. We signal who will thrive at Coinbase by being transparent about our culture on our website. We operate with the following tenets:
•Clear communication
•Efficient execution
•Act like an owner
•Top talent
•Championship team
•Continuous learning
•Customer focus
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•Repeatable innovation
•Positive energy
•Mission first
We are a remote-first company. We believe that allowing our employees to work in the location that best suits them provides us access to a large talent pool and a sustained advantage in hiring and retaining employees in the United States and worldwide.
We offer competitive, transparent compensation, and unique learning. We conduct an annual market review to ensure our compensation continues to be consistent with our competitive compensation philosophy. We have single, transparent pay targets for the vast majority of our roles—eliminating most compensation negotiations—and provide one-year equity grants for the vast majority of employees. We have also made meaningful investments in learning and development, including offering an annual learning stipend and in-house crypto learning curriculum.
We continuously improve our people programs and practices. We regularly monitor engagement through pulse surveys to continuously optimize our culture, employee engagement, risk management, and productivity. We invest in these surveys and associated action planning at the executive level, as we believe our people and culture are key drivers of business success.
As of December 31, 2025, we had 4,951 employees.
Government Regulation
We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business operations and future business plans. Many of these laws and regulations continue to evolve through legislative and regulatory action and judicial interpretation, and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the products we offer, require us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that regulators may disagree with our conclusions.
Therefore, we monitor these areas closely and invest significant resources in our legal, compliance, product, and engineering teams to ensure our business practices evolve to help us comply with the current laws, regulations, and legal standards to which we are subject, as well as to plan and prepare for changes in interpretations thereof, as well as additional laws, regulations, and legal standards that are introduced in the future.
For additional information about government regulation applicable to our business, see the sections titled “Risk Factors” and “Legal Proceedings” in Part I, Item 1A and 3, respectively, of this Annual Report on Form 10-K.
Anti-money laundering and counter-terrorist financing
We are subject to various anti-money laundering and counter-terrorist financing laws, including the Bank Secrecy Act (the “BSA”) in the United States, and similar laws and regulations abroad. In the United States, as a money services business registered with the Financial Crimes Enforcement Network (“FinCEN”), we are required under the BSA to among other things, develop, implement, and maintain a risk-based anti-money laundering program, provide an anti-money laundering-related training program, report suspicious activities and transactions to FinCEN, comply with certain reporting and recordkeeping requirements, and collect and maintain information about our customers. In addition, the BSA requires us to comply with certain customer due diligence requirements as part of our anti-money laundering obligations, including developing risk-based policies, procedures, and internal controls reasonably designed to verify a customer’s identity. Many states and other countries impose similar and, in some
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cases, more stringent requirements related to anti-money laundering and counter-terrorist financing. Our compliance program is designed to prevent and detect instances of money laundering, terrorist financing, and other illicit activity on our platform. It is also designed to prohibit the use of Coinbase in sanctioned jurisdictions, or by sanctioned persons or entities, as determined by the Office of Foreign Assets Control (“OFAC”), and equivalent foreign authorities. It includes policies, procedures, reporting protocols, and internal controls, and is designed to address legal and regulatory requirements as well as to assist us in managing risks associated with money laundering and terrorist financing. As part of our compliance program, we limit the use of our products and services to jurisdictions where we are legally able to offer our products and services, and customers can only use our products and services in the specific jurisdictions we have approved. We enforce such geographic restrictions though various onboarding and login controls to limit a customer from accessing products or services outside of their jurisdiction-based permissions. Additionally, we have a robust KYC program, which is a central part of our anti-money laundering program. Our KYC program is governed by our Global KYC Policy that covers customer onboarding, and includes customer due diligence; calculation and assessment of customer risk rating; application of enhanced due diligence on high risk customers; and screening customers against global sanctions lists. Following the customer onboarding process, we perform ongoing monitoring of customers and transaction activity to ensure that potentially suspicious activity is appropriately detected, and when appropriate, reported. Anti-money laundering regulations are constantly evolving and vary from jurisdiction-to-jurisdiction. We continuously monitor our compliance with anti-money laundering and counter-terrorist financing regulations and industry standards and implement policies, procedures, and controls in light of the most current legal requirements.
For a description of the risks we may face from (i) unauthorized or impermissible customer access to our products and services outside of jurisdictions where we have determined to make such products and services available or (ii) an assertion of jurisdiction over our operations or the crypto assets we offer by U.S. and foreign regulators and other government entities, see the following risk factors in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K: (i) “We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition”; (ii) “As we continue to expand and localize our international activities, our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering”; and (iii) “A particular crypto asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.”
Money transmission, stored value, and virtual currency business activity
In the United States, we have obtained licenses to operate as a money transmitter or the equivalent in the states where such licenses or equivalent are required to conduct our business, as well as in the District of Columbia and Puerto Rico. In addition, we have obtained a BitLicense from NYDFS and a Virtual Currency Business License from Louisiana. As a licensed money transmitter and an entity subject to the BitLicense regulatory regime, we are subject to, among other things, the BSA, restrictions, and requirements with respect to the investment of customer funds and use and safeguarding of customer funds and crypto assets, and bonding, minimum capital and net worth requirements, prudential compliance obligations associated with customer notice and disclosure, reporting and recordkeeping requirements applicable to the company, as well as requirements relating to the screening of control persons and inspection and examination by state regulatory agencies. These state licensing laws also cover matters such as regulatory approval of controlling shareholders, directors, and senior management of the licensed entity.
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Outside the United States, we have obtained a number of licenses to provide crypto-asset custody and trading services. In Singapore, we hold a major payment institution license issued by the Monetary Authority of Singapore. In Australia, we are registered as a digital currency exchange provider with the Australian Transaction Reports and Analysis Centre. We are also registered as a Reporting Entity with the Financial Intelligence Unit of India and as a Money Services Business with the Financial Transactions and Reports Analysis Centre of Canada; we have also registered as a Restricted Dealer by the Canadian Securities Administrators, with the Ontario Securities Commission as its Principal Regulator. In Bermuda, we have obtained a ‘Class ‘F’ (Full) Digital Asset Business License from the Bermuda Monetary Authority enabling us to service consumer trading in numerous approved jurisdictions. In addition, we have obtained Virtual Asset Service Provider registrations in Argentina and the United Kingdom through which we offer crypto custody and trading services in these countries, as well as a MiCA license in Luxembourg to offer crypto custody and trading services across the European Economic Area (“EEA”). Additionally, Deribit has a conditional Virtual Asset Service Provider license issued by the Virtual Asset Regulatory Authority of Dubai. Under these licenses and registrations, we are subject to a broad range of rules and regulations including in respect of anti-money laundering, safeguarding of customer assets and funds, regulatory capital requirements, fit and proper management, operational controls, corporate governance, customer disclosures, reporting, and record keeping.
Electronic money and payment institution
We serve our customers through Electronic Money Institutions authorized by the U.K. Financial Conduct Authority and the Central Bank of Ireland. We comply with rules and regulations applicable to the European e-money industry, including those related to funds safeguarding, corporate governance, anti-money laundering, disclosure, reporting, and inspection. We are, or may be, subject to banking-related regulations in other countries now or in the future related to our role in the financial industry.
New York State trust company
Our subsidiary, CCTC, operates as a New York State-chartered limited purpose trust company, which is subject to regulation, examination, and supervision by the NYDFS. NYDFS regulations impose various compliance requirements including, without limitation, operational limitations related to the nature of crypto assets we can hold under custody, capital requirements, BSA and anti-money laundering program requirements, affiliate transaction limitations, and notice and reporting requirements.
Securities
In recent years, the Securities and Exchange Commission (the “SEC”) and U.S. state securities regulators have stated that certain digital assets or digital asset products may be classified as securities under U.S. federal and state securities laws, and in the case of the SEC, has made public statements on this topic—however, these statements are not binding or definitive guidance. A number of enforcement actions and regulatory proceedings have since been initiated and concluded against digital assets and digital asset products, as well as against trading platforms that support digital assets and digital asset products. The SEC has characterized a number of crypto assets, products, and services as securities in these regulatory proceedings and enforcement actions, including an enforcement action brought against us. On February 28, 2025, we, Coinbase, Inc. and the SEC jointly stipulated to dismissal of SEC v. Coinbase, Inc. et al. with prejudice. The case is now concluded. The SEC has stated more recently that a crypto asset itself is not a security, but there is uncertainty and inconsistency in the courts that have grappled with the issue of whether or how certain crypto asset transactions could be deemed securities. Several foreign governments have also issued similar warnings cautioning that digital assets may be deemed to be securities or other similarly regulated financial instruments under the laws of their jurisdictions. We have established policies and practices to evaluate each crypto asset we consider for listing, delisting, or for custody. We also evaluate all other products and services prior to launch under U.S. federal and applicable international securities laws.
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Our subsidiary, Coinbase Capital Markets Corporation, operates as a SEC-registered broker-dealer and is a member of the Financial Industry Regulatory Authority (“FINRA”), and in December 2025, began offering equities trading to individual U.S. customers as an introducing broker in partnership with a carrying broker.
Commodities and derivatives
The Commodity Futures Trading Commission (“CFTC”) has stated, and CFTC enforcement actions have confirmed, that many crypto assets, including Bitcoin and Ethereum, fall within the definition of a “commodity” under the U.S. Commodities Exchange Act of 1936 (the “CEA”). Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot commodity markets, including the spot crypto markets. We are subject to such authority with respect to improper trading on our platform. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products, and certain retail leveraged commodity transactions involving crypto assets, including the markets on which these products trade. Separately, security-based swaps are subject to SEC regulation and oversight. In general, we seek to ensure that crypto asset transactions on our crypto asset trading platform do not constitute futures, swaps, security-based swaps, other derivative products, or retail leveraged commodity transactions. Our subsidiary, Coinbase Financial Markets, Inc. (“CFM”) operates as a futures commission merchant (“FCM”) and in December 2025, began offering event contracts. In September 2023, Coinbase International Exchange secured regulatory approval from the Bermuda Monetary Authority to enable perpetual futures for eligible non-U.S. customers, and in February 2022, we acquired LMX Labs, LLC, a designated contract market (“DCM”) regulated by the CFTC which now operates as the Coinbase Derivatives Exchange, in connection with our acquisition of FairXchange, Inc. FCMs and DCMs are subject to the rules of the National Futures Association as well as numerous regulatory requirements, including strict capital requirements. Our subsidiary, Coinbase Financial Services Europe Ltd is licensed as a derivatives broker under Markets in Financial Instruments Directive, subject to the supervision of the Cyprus Securities and Exchange Commission to offer derivatives products to eligible customers in the European Union. Deribit FZE operates a derivatives exchange under the supervision of the Virtual Asset Regulatory Authority of Dubai. While many of our products are offered under the authority of the CFTC, state laws and regulations may create conflicting obligations or constraints on our business. We may become subject to regulatory scrutiny or legal challenge with respect to our compliance with these requirements.
Anti-corruption, economic and trade sanctions and export controls
We are subject to anti-corruption and economic and trade sanctions laws and regulations in the United States and other jurisdictions in which we operate. Anti-corruption laws, such as the Foreign Corrupt Practices Act in the United States and the Bribery Act 2010 in the United Kingdom (the “Bribery Act”), generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials and political figures for the purpose of obtaining or retaining business or to gain an unfair business advantage. Some of these laws, such as the Bribery Act, also prohibit improper payments between private entities and persons. Economic and trade sanctions programs that are administered by the U.S. Department of the Treasury’s OFAC and equivalent applicable foreign authorities prohibit or restrict transactions to or from, or dealings with or involving, certain countries, regions, governments, and in certain circumstances, specified individuals and entities such as narcotics traffickers, terrorists, and terrorist organizations, as well as certain digital currency addresses owned by the foregoing. We are also required to comply with export control laws and regulations administered by the United States and other applicable jurisdictions, including those administered by the U.S. Department of Commerce’s Bureau of Industry and Security. We have implemented compliance programs and controls designed to comply with the laws and regulations to which we are subject.
Privacy and protection of user data
We are subject to a number of laws, rules, directives, and regulations relating to the collection, use, retention, security, processing, and transfer of personally identifiable information about our customers and
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employees in the countries where we operate. Our business relies on the processing of personal data in many jurisdictions and the movement of data across national borders. As a result, much of the personal data that we process, which may include certain financial information associated with individuals, is regulated by multiple privacy and data protection laws and, in some cases, the privacy and data protection laws of multiple jurisdictions. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries, and other parties with which we have commercial relationships.
Consumer protection
The Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), and other U.S. federal, state, and local and foreign regulatory agencies regulate financial products, including money transfer services related to remittance or peer-to-peer transfers. These agencies, as well as certain other governmental bodies, including state attorneys general, have broad consumer protection mandates and discretion in enforcing consumer protection laws, including matters related to unfair or deceptive, and, in the case of the CFPB, abusive acts or practices (“UDAAPs”), and they promulgate, interpret, and enforce rules and regulations that affect our business. The CFPB has enforcement authority to prevent an entity that offers or provides consumer financial services or products in the United States from committing or engaging in UDAAPs or violating other federal consumer financial laws, including the ability to engage in joint investigations with other agencies, issue subpoenas and civil investigative demands, conduct hearings and adjudication proceedings, commence a civil action, grant relief (e.g., limit activities or functions; rescission of contracts), and refer matters for criminal proceedings. Market disruptions have led to certain attempts by consumer protection focused agencies, including the CFPB, to directly regulate the crypto industry. New laws or regulations, or changes in enforcement of existing laws or regulations could require us to change certain business practices related to consumer disclosures, marketing and operational features related to payments and remittance regulations and other laws that may impact our business.
Escheatment and unclaimed property regulations
We are subject to unclaimed property laws in the United States and in certain other jurisdictions where we operate. These laws may require us to turn over to certain government authorities the property of others held by us that has been unclaimed for a specified period of time, including airdropped tokens and forked crypto assets. These laws may also require us to liquidate that property prior to turning it over. We hold property subject to unclaimed property laws; however, there is significant regulatory uncertainty with how certain states and foreign jurisdictions treat crypto assets under unclaimed property rules.
Lending law
We originate secured commercial loans in certain states in the United States. As a result, our lending activities are subject to various state lending laws and licensure requirements with respect to lending activities within such states. These state lending laws may be enforced by state attorneys general, state financial regulators, and private litigants, among others. Given our novel business model and uncertainty regarding application of some of these laws and regulations, we may become subject to regulatory scrutiny or legal challenge with respect to our compliance with these requirements.
Interchange fees
Interchange fees associated with four-party payments systems are being reviewed or challenged in various jurisdictions. For example, in the E.U., the Multilateral Interchange Fee Regulation caps interchange fees for credit and debit card payments and provides for business rules to be complied with by any company dealing with card transactions, including us. As a result, the fees that we collect in certain jurisdictions may become the subject of regulatory challenge.
Prepaid cards, card association and payment network rules
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Prepaid card programs are subject to various federal and state laws and regulations, including consumer financial protection regulations such as the CFPB’s Regulation E, which imposes requirements on issuers of prepaid cards.
In addition to the federal and state laws and regulations governing prepaid cards, we, as well as the banks that issue our Coinbase Card and Coinbase One Credit Card, are subject to and required to comply with card association and payment network rules and guidelines which apply to prepaid cards. The card association and payment network rules govern a variety of areas, including how consumers and merchants may use their cards and data security, and may be changed periodically. The laws, rules and regulations impose compliance obligations and costs on our business, and failure to comply could result in litigation, enforcement actions, penalties, or the termination of our ability to offer prepaid cards.
Furthermore, the bylaws and agreements between clearing house participants, payment networks, and credit and debit card issuers impose specific responsibilities and liabilities for issuers of debit and credit cards and the brands that partner with such issuers. We, as well as the banks that issue our Coinbase Card (debit) and our Coinbase One Credit Card (credit), are required to comply with the appropriate National Automated Clearing House Association (“NACHA”), bylaws, operating rules, and agreements, as well as card network rules and guidelines, each as applicable. Additional new products and services that we offer may also impose additional obligations on us to comply with NACHA and card network obligations related to preventing fraud, money laundering, and IT security breaches.
Intellectual Property
The protection of our technology and intellectual property is an important aspect of our business. We rely upon a variety of protections, including a combination of patents, trademarks, trade secrets, copyrights, confidentiality procedures, and contractual commitments. We co-founded the Crypto Open Patent Alliance, and pledged to only use our crypto technology patents defensively. We may also in the future agree to license our patents to third parties as part of various patent pools and open patent projects.
Corporate Information
We were initially incorporated in May 2012 as Coinbase, Inc., a Delaware corporation. In January 2014, Coinbase Global, Inc. was incorporated as a Delaware corporation to act as the holding company of Coinbase, Inc. and our other subsidiaries. In April 2014, we completed a corporate reorganization whereby Coinbase, Inc. became a wholly-owned subsidiary of Coinbase Global, Inc. In December 2025, Coinbase Global, Inc. converted to a Texas corporation. Coinbase Global, Inc.’s principal assets are its interests in the equity of Coinbase, Inc. In addition to Coinbase, Inc., Coinbase Global, Inc. is the parent company of a number of other operating subsidiaries. We are a remote-first company, meaning the majority of our employees work remotely. Due to this, we do not maintain a headquarters.
Coinbase, the Coinbase logo, and other registered or common law trade names, trademarks, or service marks of Coinbase included in this Annual Report on Form 10-K are the property of Coinbase. Other trademarks, service marks, or trade names included in this Annual Report on Form 10-K are the property of their respective owners.
Available Information
We file our annual, periodic and current reports, and other required information, electronically with the SEC and this information is available at www.sec.gov. We also make available on our website at www.coinbase.com, free of charge, copies of these reports and other information as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We use our Investor Relations website (investor.coinbase.com), our blog (blog.coinbase.com), press releases, public conference calls and webcasts, our X feed (@coinbase), Brian Armstrong’s X feed (@brian_armstrong), our LinkedIn page, and our YouTube channel as means of disclosing material non-
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public information and for complying with our disclosure obligations under Regulation FD. The information disclosed by the foregoing channels could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. The contents of the websites referred to above are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to websites are intended to be inactive textual references only.
ITEM 1A. RISK FACTORS
Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, operating results, financial condition, and future prospects could be materially and adversely affected. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories. The market price of our Class A common stock could decline, and you could lose part or all of your investment due to any of these risks.
The Most Material Risks Related to Our Business and Financial Position
Our operating results have and will significantly fluctuate, including due to the highly volatile nature of crypto.
Due to the highly volatile nature of prices of crypto assets, our operating results have, and will continue to, fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader onchain economy. Our operating results will continue to fluctuate significantly as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of our control, including:
•crypto asset trading activity, including trading volume and the prevailing trading prices for crypto assets, which can be highly volatile;
•our ability to attract, maintain, grow, and engage our customer and developer base;
•changes in the legislative or regulatory environment, or actions by U.S. or foreign governments or regulators, including fines, orders, or consent decrees;
•regulatory changes or scrutiny that impact our ability to offer certain products or services;
•our ability to continue to diversify and grow our subscription and services revenue, including our stablecoin revenue;
•our mix of revenue between transaction and subscription and services;
•pricing for, or temporary suspensions of, our products and services;
•adding crypto assets to, or removing from, our platform;
•our ability to establish and maintain partnerships, collaborations, joint ventures, or strategic alliances with third parties;
•fluctuations in the market values of our marketable and strategic investments;
•market conditions of, and overall sentiment towards, crypto;
•macroeconomic conditions, including interest rates, inflation, changes in tariffs and trade restrictions, extended U.S. federal government shutdowns, and instability in the global banking system;
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•adverse legal proceedings or regulatory enforcement actions, judgments, settlements, or other legal proceedings, and enforcement-related costs;
•the development and introduction of existing and new products and services by us or our competitors;
•the amount and timing of our operating expenses related to the maintenance and expansion of our business and operations, including investments we make in the development of products and services, as well as technology offered to our developers, international expansion, and sales and marketing;
•system failures, outages or interruptions, including with respect to our platform and third-party crypto networks;
•our lack of control over decentralized or third-party blockchains and networks that may experience downtime, cyberattacks, critical failures, errors, bugs, corrupted files, data losses, or other similar software failures, outages, breaches and losses;
•breaches of security or privacy;
•inaccessibility of our platform due to our or third-party actions;
•our ability to attract and retain talent; and
•our ability to compete with our competitors.
As a result of these factors, it is difficult for us to forecast growth trends accurately and our business and future prospects are difficult to evaluate, particularly in the short term.
In view of the rapidly evolving nature of our business and the volatility of the markets in which we operate, period-to-period comparisons of our operating results may not be meaningful, and you should not rely upon them as an indication of future performance. Quarterly and annual expenses reflected in our financial statements may be significantly different from historical or projected rates. Our operating results in one or more future quarters may fall below the expectations of securities analysts and investors. As a result, the trading price of our Class A common stock may increase or decrease significantly.
Our total revenue is substantially dependent on the prices of crypto assets and volume of transactions conducted on our platform. If such price or volume declines, our business, operating results, and financial condition would be adversely affected and the price of our Class A common stock could decline.
We generate a large portion of our total revenue from transaction fees on our platform in connection with the purchase, sale, and trading of crypto assets by our customers. Transaction revenue is based on transaction fees that are either a flat fee or a percentage of the value of each transaction. For our consumer trading product, we also charge a spread to ensure that we are able to settle purchases and sales at the prices we quote to customers. We also generate a large portion of total revenue from our subscription and services, and such revenue has grown over time, primarily due to growth in stablecoin revenue in connection with payment stablecoins. Declines in the volume of crypto asset transactions, the price of crypto assets, or market liquidity for crypto assets generally may result in lower total revenue to us.
The price of crypto assets and associated demand for buying, selling, and trading crypto assets have historically been subject to significant volatility. If the price and transaction volume of crypto assets decline in the future, our ability to generate revenue may suffer and customer demand for our products and services may decline, which could adversely affect our business, operating results and financial condition and cause the price of our Class A common stock to decline. The price and transaction volume of any crypto asset is subject to significant uncertainty and volatility, depending on a number of factors, including:
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•market conditions of, and overall sentiment towards, crypto assets, including, but not limited to, as a result of actions taken by or developments of other companies in our industry;
•changes in liquidity, market-making volume, and trading activities;
•trading activities on other crypto platforms worldwide, many of which may be unregulated, and may include manipulative activities;
•investment and trading activities of highly active consumer and institutional users, speculators, miners, and investors;
•the speed and rate at which crypto is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all;
•decreased user and investor confidence in crypto assets and crypto platforms;
•negative publicity and events relating to the onchain economy;
•unpredictable social media coverage or “trending” of, or other rumors and market speculation regarding, crypto assets;
•the ability for crypto assets to meet user and investor demands;
•the functionality and utility of crypto assets and their associated ecosystems and networks, including crypto assets designed for use in various applications;
•consumer preferences and perceived value of crypto assets and crypto asset markets;
•increased competition from other payment services or other crypto assets that may exhibit better speed, security, scalability, or other characteristics;
•adverse legal proceedings or regulatory enforcement actions, judgments, or settlements impacting industry participants;
•regulatory or legislative changes, scrutiny and updates affecting the onchain economy;
•the characterization of crypto assets under the laws of various jurisdictions around the world;
•the adoption of unfavorable taxation policies on crypto asset investments by governmental entities;
•the maintenance, troubleshooting, and development of the blockchain networks underlying crypto assets, including by miners, validators, and developers worldwide;
•the ability for crypto networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently;
•legal and regulatory changes affecting the operations of miners and validators of blockchain networks, including limitations, and prohibitions on mining activities, or new legislative or regulatory requirements as a result of growing environmental concerns around the use of energy in Bitcoin and other proof-of-work mining activities;
•ongoing technological viability and security of crypto assets and their associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability;
•speed and fees associated with processing crypto asset transactions, including on the underlying blockchain networks and on crypto platforms;
•financial strength of market participants;
•the availability and cost of funding and capital;
•the liquidity and credit risk of other crypto platforms and other participants of the onchain economy;
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•interruptions or temporary suspensions or other compulsory restrictions in products or services from or failures of major crypto platforms;
•availability of an active derivatives market for various crypto assets;
•availability of banking and payment services to support crypto-related projects;
•instability in the global banking system and the level of interest rates and inflation;
•monetary policies of governments, trade restrictions, and fiat currency devaluations; and
•national and international economic and political conditions.
There is no assurance that any supported crypto asset will maintain its value or that there will be meaningful levels of trading activities. In the event that the price of crypto assets or the demand for trading crypto assets decline, our business, operating results, and financial condition would be adversely affected and the price of our Class A common stock could decline.
Our net revenue may be concentrated in a limited number of areas. Within transaction revenue and subscription and services revenue, a meaningful concentration is from transactions in Bitcoin and Ethereum and stablecoin revenue in connection with payment stablecoins, respectively. If revenue from these areas declines and is not replaced by new demand for crypto assets or other products and services, our business, operating results, and financial condition could be adversely affected.
While we support a diverse portfolio of crypto assets for trading, staking and custody, our net revenue is concentrated in a limited number of areas, such as transactions in Bitcoin and Ethereum for transaction revenue and stablecoin revenue in connection with payment stablecoins for subscription and services revenue. For the years ended December 31, 2025 and 2024, we derived a meaningful amount of our net revenue from transaction fees generated in connection with the trading of Bitcoin and Ethereum; these trading pairs drove approximately 45% and 46% of total Trading Volume on our platform during these periods, respectively. In addition to the factors impacting the broader onchain economy described in this section, our revenue may be adversely affected if the markets for Bitcoin and Ethereum deteriorate or if their prices decline, including as a result of the following factors:
•the reduction in blockchain transaction fees of Bitcoin, including block reward halving events, which are events that occur after a specific period of time and reduce the block reward earned by miners;
•public sentiment related to the actual or perceived environmental impact of Bitcoin, Ethereum, and related activities, including environmental concerns raised by private individuals and governmental actors related to the energy resources consumed in the Bitcoin mining process;
•disruptions, hacks, splits in the underlying networks also known as “forks,” attacks by malicious actors who control a significant portion of the networks’ hash rate such as double spend or 51% attacks, or other similar incidents affecting the Bitcoin or Ethereum blockchain networks;
•hard “forks” resulting in the creation of and divergence into multiple separate networks, such as Bitcoin Cash and Ethereum Classic;
•informal governance led by Bitcoin and Ethereum’s core developers that lead to revisions to the underlying source code or inactions that prevent network scaling, and which evolve over time largely based on self-determined participation, which may result in new changes or updates that affect their speed, security, usability, or value;
•the ability for Bitcoin and Ethereum blockchain networks to resolve significant scaling challenges and increase the volume and speed of transactions;
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•the ability to attract and retain customers and developers to use Bitcoin and Ethereum for payment, store of value, unit of accounting, and other intended uses and the absence of another supported crypto asset to attract and retain developers and customers for the same;
•transaction congestion and fees associated with processing transactions on the Bitcoin and Ethereum networks and the absence of another supported crypto asset to replace these transactions;
•the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins;
•negative perception of Bitcoin or Ethereum;
•developments in mathematics and technology, including in digital computing, algebraic geometry, and quantum computing that could result or be perceived to result in the cryptography being used by Bitcoin and Ethereum becoming insecure or ineffective;
•adverse legal proceedings or regulatory enforcement actions, judgments, or settlements impacting industry participants;
•regulatory, legislative or other compulsory or informal restrictions or limitations on Bitcoin or Ethereum lending, mining or staking activities;
•liquidity and credit risk issues experienced by other crypto platforms and other participants of the onchain economy; and
•laws and regulations affecting the Bitcoin and Ethereum networks or access to these networks, including a determination that either Bitcoin or Ethereum constitutes a controlled or otherwise regulated financial instrument under the laws of any jurisdiction.
Our subscription and services revenue has grown over time to represent a more meaningful amount of our revenue, primarily due to growth in stablecoin revenue received in connection with payment stablecoins. Such revenue depends on a variety of factors, including demand for our subscription and services offerings, demand for payment stablecoins, the overall payment stablecoin market capitalization, the mix of payment stablecoin balances held in Coinbase products as compared to that held off-platform, interest rates, and our ongoing relationships with third parties, such as Circle. If such factors are negatively impacted, our business, operating results, and financial condition could be adversely affected.
We have in the past, and may in the future, enter into partnerships, collaborations, joint ventures, or strategic alliances with third parties. If we are unsuccessful in establishing or maintaining strategic relationships with these third parties or if these third parties fail to deliver certain operational services, our business, operating results, and financial condition could be adversely affected.
We have in the past, and may in the future, enter into partnerships, collaborations, joint ventures, or strategic alliances with third parties in connection with the development, operation, and enhancement of our platform and products and the provision of our services. For example, Circle provides us with creation and redemption services for USDC, including the operational capabilities required for our USDC customer-facing services. If Circle fails to provide certain operational services, our ability to maintain our current level of offerings and customer experience for USDC could be harmed and interest or confidence in USDC could be impacted. Identifying strategic relationships with third parties and negotiating and documenting relationships with them may be time-consuming and complex and may distract management. Moreover, we may be delayed, or not be successful, in achieving the objectives that we anticipate as a result of such strategic relationships. In evaluating counterparties in connection with partnerships, collaborations, joint ventures or strategic alliances, we consider a wide range of economic, legal and regulatory criteria depending on the nature of such relationship, including the counterparties’ reputation, operating results and financial condition, operational ability to satisfy our and our customers’ needs in a timely manner, efficiency and reliability of systems, certifications costs to us or to our
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customers, and licensure and compliance status. Despite this evaluation, third parties may still not meet our or our customers’ needs which may adversely affect our ability to deliver products and services to customers, and could adversely affect our business, operating results, and financial condition. Counterparties to any strategic relationship may have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals, and may subject us to additional risks to the extent any such third party becomes the subject of negative publicity, faces its own litigation or regulatory challenges, or faces other adverse circumstances. Conflicts may arise with our strategic partners, such as the interpretation of significant terms under any agreement, which may result in litigation or arbitration which would increase our expenses and divert the attention of our management. If we are unsuccessful in establishing or maintaining strategic relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our business, operating results, and financial condition could be adversely affected.
Interest rate fluctuations could negatively impact us.
The level of prevailing short-term interest rates affects our profitability because we derive a large portion of our revenue from interest earned on funds deposited with us by our customers which we hold on their behalf in custodial accounts at financial institutions and from stablecoin revenue, which is derived from interest earned on payment stablecoins, such as USDC reserve balances, as well as from interest earned on cash and other cash equivalents. Higher interest rates increase the amount of interest and finance fee income and stablecoin revenue earned from these activities. When short-term interest rates decline, our revenue derived from interest correspondingly declines. Further, because stablecoin revenue from payment stablecoins has become an increased portion of our subscription and services revenue, if interest rates were to significantly decline, our net revenue could decline. Conversely, when interest rates increase, investors may choose to shift their asset allocations, which could negatively impact our stock price or the onchain economy more generally.
The future development and growth of crypto is subject to a variety of factors that are difficult to predict and evaluate. If crypto does not grow as we expect, our business, operating results, and financial condition could be adversely affected.
Crypto assets built on blockchain technology were only introduced in 2008 and remain in the early stages of development. In addition, different crypto assets are designed for different purposes. Bitcoin, for instance, was designed to serve as a peer-to-peer electronic cash system, while Ethereum was designed to be a smart contract and decentralized application platform. Many other crypto networks, ranging from cloud computing to tokenized securities networks, have only recently been established. The further growth and development of any crypto assets and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of crypto assets represent a new and evolving paradigm that is subject to a variety of factors that are difficult to evaluate, including:
•many crypto networks have limited operating histories, have not been validated in production, and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective crypto assets and underlying blockchain networks, any of which could adversely affect their respective crypto assets;
•many crypto networks are in the process of implementing software upgrades and other changes to their protocols, which could introduce bugs, security risks, or adversely affect the respective crypto networks;
•several large networks, including Bitcoin and Ethereum, are developing new features to address fundamental speed, scalability, and energy usage issues. If these issues are not successfully addressed, or if these networks do not achieve widespread adoption, it could adversely affect the underlying crypto assets;
•security issues, bugs, and software errors have been identified with many crypto assets and their underlying blockchain networks, some of which have been exploited by malicious actors. There
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are also inherent security weaknesses in some crypto assets, such as when creators of certain crypto networks use procedures that could allow hackers to counterfeit tokens. Any weaknesses identified with a crypto asset could adversely affect its price, security, liquidity, and adoption rate. If one or more malicious actors obtains a majority of the compute or staking power on a crypto network, as has happened in the past, it may be able to engage in illicit activity, which could cause financial losses to holders, damage the network’s reputation and security, and adversely affect its value;
•the development of new technologies for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks, lead to increased liquid supply of crypto assets, and reduce a crypto asset’s price and attractiveness;
•if rewards and transaction fees for miners or validators on any particular crypto network are not sufficiently high to attract and retain miners or validators, a crypto network’s security and speed may be adversely affected, increasing the likelihood of a malicious attack;
•crypto networks may have consolidated points of failure (such as concentrated ownership or an “admin key”), allowing a small group of holders to have significant unilateral control and influence over key decisions related to their crypto networks, such as governance decisions and protocol changes, as well as the market price of such crypto assets;
•the governance of many decentralized blockchain networks, including L2 blockchains like Base Chain (formerly Base), is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions. As a result, there may be a lack of consensus or clarity on the governance of any particular crypto network, a lack of incentives for developers to maintain or develop the network, and other unforeseen issues, any of which could result in unexpected or undesirable errors, bugs, or changes, or stymie such network’s utility and ability to respond to challenges and grow; and
•many crypto networks are in the early stages of developing partnerships and collaborations, any or all of which may not succeed and adversely affect the usability and adoption of the respective crypto assets.
Various other technical issues have also been uncovered from time to time that resulted in disabled functionalities, exposure of certain users’ personal information, theft of users’ assets, and other negative consequences, and which required resolution with the attention and efforts of their global miner, user, and development communities. If any such risks or other risks materialize, and in particular if they are not resolved, the development and growth of crypto may be significantly affected and, as a result, our business, operating results, and financial condition could be adversely affected.
Cyberattacks and security breaches of our platform, or those impacting our customers or third parties, could adversely affect our brand, reputation, business, operating results, and financial condition.
Our business involves the collection, storage, processing, and transmission of confidential information, customer, employee, service provider, and other personal data, as well as information required to access customer assets. We have built our reputation on the premise that our platform offers customers a secure way to purchase, store, and transact in crypto assets. As a result, any actual or perceived security breach of us or our third-party partners may:
•harm our reputation and brand;
•result in our systems or services being unavailable and interrupt our operations;
•result in improper disclosure of data and violations of applicable privacy and data protection laws;
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•result in significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, and financial exposure;
•cause us to incur significant remediation costs;
•lead to theft or irretrievable loss of our or our customers’ fiat currencies or crypto assets;
•reduce customer confidence in, or decrease customer use of, our products and services;
•divert the attention of management from the operation of our business;
•result in significant compensation or contractual penalties payable by us to our customers or third parties as a result of losses to them or claims by them; and
•adversely affect our business, operating results, and financial condition.
For example, as previously disclosed on a Current Report on Form 8-K filed with the SEC on May 15, 2025, a threat actor improperly obtained information about certain customer accounts and internal documentation, and used that information for social-engineering attempts. No passwords or private keys were compromised as a result of this incident. We continue to face risks related to this incident, including harm to our reputation, governmental investigations and regulatory scrutiny, and ongoing litigation.
Further, any actual or perceived breach or cybersecurity attack directed at other financial institutions or crypto companies, whether or not we are directly impacted, could lead to a general loss of customer confidence or in the use of technology to conduct financial transactions, which could negatively impact us, including the market perception of the effectiveness of our security measures and technology infrastructure.
An increasing number of organizations, including large merchants, businesses, technology companies, and financial institutions, as well as government institutions, have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile applications, and infrastructure.
Attacks upon systems across a variety of industries, including the crypto industry, are increasing in their frequency, persistence, magnitude, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including customers’ personal data and crypto assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. Certain types of cyberattacks could harm us even if our systems are left undisturbed. For example, attacks may be designed to deceive employees and service providers into releasing control of our systems to a hacker, while others may aim to introduce computer viruses or malware into our systems with a view to stealing confidential or proprietary data. Additionally, certain threats are designed to remain dormant or undetectable until launched against a target, and we may not be able to implement adequate preventative measures.
Although we have developed systems and processes designed to protect the data we manage, prevent data loss and other security breaches, effectively respond to known and potential risks, and expect to continue to expend significant resources to bolster these protections, there can be no assurance that these security measures will provide absolute security or prevent breaches or attacks. We have experienced from time to time, and may experience in the future, breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities, or other irregularities. Unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our systems and facilities, as well as those of our customers, partners, and third-party service providers, through various means, including hacking, social engineering, phishing, and attempting to fraudulently induce individuals (including employees, service providers, and our customers) into disclosing usernames, passwords, payment card information, or other sensitive information, which may in turn be
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used to access our information technology systems and customers’ crypto assets. As we grow our offering of products and services, including options and perpetual swaps, we face increased exposure to cyberattacks through third parties. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. Certain threat actors may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect. We may also acquire other companies that expose us to unexpected security risks or increase costs to improve the security posture of the acquired company. Further, there has been an increase in such threat actor activities as a result of the increased prevalence of hybrid and remote working arrangements in recent years. As a result, our costs and the resources we devote to protecting against these advanced threats and their consequences may continue to increase over time.
Although we maintain insurance coverage, it may be insufficient to protect us against all losses and costs stemming from security breaches, cyberattacks, and other types of unlawful activity, or any resulting disruptions or data theft and loss from such events. Outages and disruptions of our platform, including any caused by cyberattacks, may harm our reputation, business, operating results, and financial condition.
We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.
Our business is subject to extensive laws, rules, regulations, policies, orders, determinations, directives, treaties, and legal and regulatory interpretations and guidance in the markets in which we operate, including those governing financial services and banking, federal government contractors, trust companies, securities, derivative transactions and markets, broker-dealers and alternative trading systems (“ATS”), commodities, credit, crypto asset custody, exchange, and transfer, cross-border and domestic money and crypto asset transmission, commercial lending, usury, foreign currency exchange, privacy, data governance, data protection, cybersecurity, fraud detection, payment services (including payment processing and settlement services), consumer protection, escheatment, antitrust and competition, bankruptcy, tax, anti-bribery, economic and trade sanctions, anti-money laundering, and counter-terrorist financing. Many of these legal and regulatory regimes were adopted prior to the advent of the internet, mobile technologies, crypto assets, generative artificial intelligence (“AI”) and related technologies. As a result, some applicable laws and regulations do not contemplate or address unique issues associated with the onchain economy, are subject to significant uncertainty, and vary widely across U.S. federal, state, and local and international jurisdictions. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another. Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the onchain economy requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules, and regulations, we could be subject to significant fines, revocation of licenses, limitations on or temporary or permanent suspensions of our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
Governmental and regulatory bodies, including in the United States, may introduce new policies, laws, and regulations relating to crypto assets and the onchain economy generally, and crypto asset platforms in particular. Other companies’ failures of risk management and other control functions could contribute to stricter oversight of crypto asset platforms and the onchain economy. Furthermore, new interpretations of existing laws and regulations may be issued by such bodies or the judiciary, which may adversely impact the development of the onchain economy as a whole and our legal and regulatory status in particular by changing how we operate our business, how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain crypto
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asset transactions, as has occurred in certain jurisdictions in the past. For example, in the past few years, regulatory developments in the area of anti-money laundering, recordkeeping and prudential regulatory compliance include the Travel Rule requiring transmission of information with crypto transfers. This and similar regulations increase our compliance costs, may require operational changes, and could subject us to sanctions for technical violations.
Moreover, we offer and may in the future offer products and services that may depend on novel forms of customer engagement and interaction delivered via blockchain protocols, particularly as it relates to management of token transaction smart contracts, liquid staking, asset tracking, or other applications. We may also offer products and services whose functionality or value depends on our ability to develop, integrate, or otherwise interact with such applications within the bounds of our legal and compliance obligations. The legal and regulatory landscape for such products, including the law governing the rights and obligations between and among smart contract developers and users and the extent to which such relationships entail regulated activity are fluid. Our interaction with those applications, and the interaction of other blockchain users with any smart contracts or assets we may generate or control, could present legal, operational, reputational, and regulatory risks for our business.
We may be further subject to administrative sanctions for technical violations or customer attrition if the user experience suffers as a result. As another example, the extension of anti-money laundering requirements to certain crypto-related activities by the European Union’s Fifth Money Laundering Directive has increased the regulatory compliance burden for our business in Europe and, as a result of the fragmented approach to the implementation of its provisions, resulted in distinct and divergent national licensing and registration regimes for us in different E.U. member states. Additionally, MiCA introduces a comprehensive authorization and compliance regime for crypto asset service providers and a disclosure regime for the issuers of certain crypto assets, which will impact our operations in the European Union, including through localization requirements, due to the obligations associated with our MiCA license (obtained in June 2025).
Because we have offered and will continue to offer a variety of innovative products and services to our customers, many of our offerings are subject to significant regulatory uncertainty and we from time to time face regulatory inquiries regarding our current and planned products. For instance, we purchase USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars, from Circle and sell it to customers on our platform. The regulatory treatment of fiat-backed stablecoins is highly uncertain and has drawn significant attention from legislative and regulatory bodies around the world. The issuance, purchase, and sale of such stablecoins may implicate a variety of banking, deposit, money transmission, prepaid access and stored value, anti-money laundering, commodities, securities, sanctions, and other laws and regulations in the United States and in other jurisdictions. There are substantial uncertainties as to how these requirements would apply in practice, and we may face substantial compliance costs to operationalize and comply with these rules. In July 2025, the United States enacted the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”), which establishes a federal regulatory framework for “payment stablecoins” and their issuers and custodians. As a distributor and ecosystem partner of stablecoins, Coinbase may directly and indirectly be subject to these requirements. Additionally, our event contract products, which allow customers to trade on the outcome of future events, are subject to complex and evolving legal and regulatory frameworks and interpretation. Event contracts, whether offered by us or others, have drawn scrutiny from federal and state regulators and resulted in litigation that we are party to as well as litigation against other companies that offer event contracts. Regulators and authorities in various jurisdictions may assert that these offerings constitute gambling, sports betting, or other regulated activities under state or local laws, rather than federally regulated financial instruments. For example, courts may conclude that state laws attempting to prevent the trading of CFTC-regulated sports-related event contracts are not preempted by the CEA, or that outcome based event contracts are not “swaps” falling within the jurisdiction of the CFTC, which could impact our ability to offer certain event contracts in one or more states and could lead to adverse litigation and regulatory actions against us.
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Certain products and services offered by us that we believe are not subject to regulatory oversight, or are only subject to certain regulatory regimes, such as the Base App (formerly Coinbase Wallet), a standalone mobile application that allows customers to manage their own private keys and store their crypto assets directly on their mobile devices, may cause us to be deemed to be engaged in a form of regulated activity for which licensure is required or cause us to become subject to new and additional forms of regulatory oversight. We also offer various staking, rewards, and lending products, all of which are subject to significant regulatory uncertainty, and could implicate a variety of laws and regulations worldwide. For example, there is regulatory uncertainty regarding the status of our staking, lending, rewards, and other yield-generating activities under the U.S. federal and state securities laws. While we have implemented policies and procedures, including geofencing for certain products and services, designed to help monitor for and ensure compliance with existing and new laws and regulations, there can be no assurance that we and our employees, contractors, and agents will not violate or otherwise fail to comply with such laws and regulations. To the extent that we or our employees, contractors, or agents are deemed or alleged to have violated or failed to comply with any laws or regulations, including related interpretations, orders, determinations, directives, or guidance, we or they could be subject to a litany of civil, criminal, and administrative fines, penalties, orders and actions, including being required to suspend or terminate the offering of certain products and services. Moreover, to the extent our customers nevertheless access our platform, products or services outside of jurisdictions where we have obtained required governmental licenses and authorization, we could similarly be subject to a variety of civil, criminal, and administrative fines, penalties, orders and actions as a result of such activity.
Due to our business activities, we are subject to ongoing examinations, oversight, and reviews and currently are, and expect in the future, to be subject to investigations and inquiries, by U.S. federal and state regulators and foreign financial service regulators, many of which have broad discretion to audit and examine our business. We are periodically subject to audits and examinations by these regulatory authorities. As a result of findings from these audits and examinations, regulators have required, are requiring, and may in the future require us to take certain actions, including amending, updating, or revising our compliance measures from time to time, limiting the kinds of customers that we provide services to, changing, terminating, or delaying our licenses and the introduction of our existing or new product and services, and undertaking further external audit or being subject to further regulatory scrutiny, including investigations and inquiries. We have received, and may in the future receive, examination reports citing violations of rules and regulations, inadequacies in existing compliance programs, and requiring us to enhance certain practices with respect to our compliance program, including due diligence, monitoring, training, reporting, and recordkeeping. Implementing appropriate measures to properly remediate these examination findings may require us to incur significant costs, and if we fail to properly remediate any of these examination findings, we could face civil litigation, significant fines, damage awards, forced removal of certain employees including members of our executive team, barring of certain employees from participating in our business in whole or in part, revocation of existing licenses, limitations on existing and new products and services, reputational harm, negative impact to our existing relationships with regulators, exposure to criminal liability, or other regulatory consequences. Further, we believe increasingly strict legal and regulatory requirements and additional regulatory investigations and enforcement, any of which could occur or intensify, may continue to result in changes to our business, as well as increased costs, and supervision and examination for ourselves, our agents, and service providers. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions, including preventing or delaying us from offering certain products or services offered by our competitors or could impact how we offer such products and services. Adverse changes to, or our failure to comply with, any laws and regulations have had, and may continue to have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.
We operate in a highly competitive industry and our business, operating results, and financial condition could be adversely affected if we are unable to compete effectively.
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Our industry is highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition to intensify in the future as existing and new competitors introduce new products or enhance existing products. We face significant competition from a variety of companies around the world, ranging from crypto-native companies, including decentralized exchanges, to large traditional financial services incumbents and financial technology providers. Our main competition falls into the following categories:
•traditional financial technology and brokerage firms that have entered the crypto asset market in recent years and offer overlapping features targeted at our customers;
•companies focused on the crypto asset market, some of whom adhere to local regulations and directly compete with our platform, and others who choose to operate outside of local rules and regulations or in jurisdictions with less stringent local rules and regulations and are potentially able to more quickly adapt to trends, support a greater number of crypto assets, and develop new crypto-based products and services due to a different standard of regulatory scrutiny;
•crypto-focused companies and traditional financial incumbents that offer point or siloed solutions specifically targeted at institutional customers;
•decentralized and noncustodial platforms; and
•stablecoins, other than USDC, and fiat currencies globally.
Historically, a major source of competition has been from companies, in particular those located outside the United States, who at times are and may in the future be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Their business models rely on being unregulated or only regulated in a small number of lower compliance jurisdictions, whilst also offering their products in highly regulated jurisdictions, including the United States, without necessarily complying with the relevant regulatory requirements in such jurisdictions.
Given the uneven enforcement by United States and foreign regulators, many of these competitors have been able to operate from offshore while offering large numbers of products and services to consumers, including in the United States, Europe, and other highly regulated jurisdictions, without complying with the relevant licensing and other requirements in these jurisdictions, and historically without penalty. Due to our regulated status in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and services, including products and services that our unregulated or less regulated competitors are able to offer.
We also have expended significant managerial, operational, and compliance costs to comply with laws and regulations applicable to us in the jurisdictions in which we operate, and expect to continue to incur significant costs to comply with these requirements, which these unregulated or less regulated competitors have not had to incur.
Our competitors have made significant investments in research and development, and we expect these companies to continue to develop similar or superior products and technologies that compete with our products. Further, more traditional financial and non-financial services businesses may choose to offer crypto-based services in the future as the industry gains adoption and barriers to entry lower. As regulations and compliance requirements in the United States become clearer, we may face increased competition from companies based in the United States. Our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources.
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Our existing competitors have, and our potential competitors are expected to have, competitive advantages over us, such as:
•the ability to trade crypto assets and offer products and services, including non-crypto financial products and services, that we do not support or offer on our platform (due to constraints from regulatory authorities, our financial institution partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws;
•greater name recognition, longer operating histories, larger customer bases, and larger market shares;
•larger sales and marketing budgets and organizations;
•more established marketing, banking, and compliance relationships;
•greater customer support resources;
•greater resources to make acquisitions;
•lower labor, compliance, risk mitigation, and research and development costs;
•larger and more mature intellectual property portfolios;
•greater number of applicable licenses or similar authorizations;
•established core business models outside of the trading of crypto assets, allowing them to operate on lesser margins or at a loss;
•operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and
•substantially greater financial, technical, and other resources.
If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results, and financial condition could be adversely affected.
We compete against a growing number of decentralized and noncustodial platforms and our business, operating results, and financial condition could be adversely affected if we fail to compete effectively.
We compete against an increasing number of decentralized and noncustodial platforms. On these platforms, users can interact directly with a market-making smart contract or onchain trading mechanism to earn crypto assets or to exchange one type of crypto asset for another without any centralized intermediary. We have seen increased interest in certain decentralized platforms with transaction volumes rivaling our own platform on multiple occasions, and expect interest in decentralized and noncustodial platforms to grow further as the industry develops. If the demand for decentralized platforms grows and we are unable to compete with these decentralized and noncustodial platforms, including, for example, if we fail to achieve sufficient decentralization and scaling of Base Chain (formerly Base) as an L2, our business, operating results, and financial condition could be adversely affected.
As we continue to expand and localize our international activities, our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering.
As we expand and localize our international activities, we have become increasingly obligated to comply with the laws, rules, regulations, policies, and legal interpretations of both the jurisdictions in which we operate and those into which we offer services on a cross-border basis. For instance, financial regulators outside the United States have increased their scrutiny of crypto asset exchanges over time,
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such as by requiring crypto asset exchanges operating in their local jurisdictions to be regulated and licensed under local laws. Moreover, laws regulating financial services, the internet, mobile technologies, crypto, AI, and related technologies outside of the United States are highly evolving, extensive and often impose different, more specific, or even conflicting obligations on us, as well as broader liability. In addition, we are required to comply with laws and regulations related to economic sanctions and export controls enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the U.S. Department of Commerce’s Bureau of Industry and Security, and U.S. anti-money laundering and counter-terrorist financing laws and regulations, enforced by FinCEN and certain state financial services regulators. U.S. sanctions and export control laws and regulations generally restrict dealings by persons subject to U.S. jurisdiction with certain jurisdictions that are the target of comprehensive embargoes, as well as with persons, entities, and governments identified on certain prohibited party lists. Moreover, as a result of the Russian invasion of Ukraine, the United States, the E.U., the United Kingdom, and other jurisdictions have imposed wide-ranging sanctions on Russia and Belarus and persons and entities associated with Russia and Belarus. There can be no certainty regarding whether such governments or other governments will impose additional sanctions, or other economic or military measures against Russia or Belarus. We have continued to engage in activity in Russia and Belarus and with customers associated with these countries. At the same time, we have implemented additional processes and procedures to comply with these new sanctions. However, our activity in Russia and Belarus and with these customers associated with these countries subjects us to further exposure to sanctions as they are released. We have an OFAC compliance program in place that includes monitoring of IP addresses to identify prohibited jurisdictions and of blockchain addresses that have either been identified by OFAC as prohibited or that otherwise are believed by us to be associated with prohibited persons or jurisdictions. Nonetheless, there can be no guarantee that our compliance program will prevent transactions with particular persons or addresses or prevent every potential violation of OFAC sanctions. From time to time, we have submitted voluntary disclosures to OFAC or responded to administrative subpoenas from OFAC. To date, none of those proceedings has resulted in a monetary penalty or finding of violation. Any present or future government inquiries relating to sanctions could result in negative consequences for us, including costs related to government investigations, financial penalties, and harm to our reputation. The impact on us related to such matters could be substantial. Although we have implemented controls, and are working to implement additional controls and screening tools designed to prevent sanctions violations, there is no guarantee that we will not inadvertently provide access to our products and services to sanctioned parties or jurisdictions in the future.
Regulators worldwide frequently study each other’s approaches to the regulation of our industry. Consequently, developments in any jurisdiction may influence other jurisdictions. New developments in one jurisdiction may be extended to additional services and other jurisdictions. As a result, the risks created by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting our business in another place or involving another service. Conversely, if regulations diverge worldwide, we may face difficulty adjusting our products, services, and other aspects of our business with the same effect. These risks are heightened as we face increased competitive pressure
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from other similarly situated businesses that engage in regulatory arbitrage to avoid the compliance costs associated with regulatory changes.
The complexity of U.S. federal and state and international regulatory and enforcement regimes, coupled with the global scope of our operations and the evolving global regulatory environment, could result in a single event prompting a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm our reputation, damage our brand, and adversely affect our business, operating results, and financial condition. Due to the uncertain application of existing laws and regulations, it may be that, despite our regulatory and legal analysis concluding that certain products and services are currently unregulated, such products or services may indeed be subject to financial regulation, licensing, or authorization obligations that we have not obtained or with which we have not complied. As a result, we are at a heightened risk of enforcement action, litigation, regulatory, and legal scrutiny which could lead to sanctions, cease and desist orders, or other penalties and censures which could adversely affect our business, operating results, and financial condition.
We are, and may continue to be, subject to litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could adversely affect our business, operating results, and financial condition.
We have been, currently are, and may from time to time become subject to claims, arbitrations, individual and class action lawsuits with respect to a variety of matters, including employment, consumer protection, intellectual property, privacy, information security, data protection, advertising, and securities. In addition, we have been, currently are, and may from time to time become subject to, government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. For a description of our material litigation, regulatory investigations, and other proceedings, see Note 21. Commitments and Contingencies of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. The scope, determination, and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with certainty and may result in:
•substantial payments to satisfy judgments, fines, or penalties;
•substantial outside counsel, advisor, and consultant fees and costs;
•substantial administrative costs, including arbitration fees;
•additional compliance and licensure requirements;
•loss or non-renewal of existing licenses or authorizations, or prohibition from or delays in obtaining additional licenses or authorizations, required for our business;
•loss of productivity and high demands on employee time;
•criminal sanctions or consent decrees;
•termination of certain employees, including members of our executive team;
•barring of certain employees from participating in our business in whole or in part;
•orders that restrict our business or prevent us from offering certain products or services;
•changes to our business model and practices;
•delays to planned transactions, product launches or improvements; and
•damage to our brand and reputation.
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Because of our large customer base, actions against us may claim large monetary damages, even if the alleged per-customer harm is small or non-existent. From time to time, we receive letters alleging claims on behalf of our users. Due to our large customer base, the ongoing defense and resolution or settlement of these alleged claims could be material and we may incur significant expenses associated with arbitrating or litigating the claims. Moreover, to the extent that a deterioration of the crypto asset market occurs, large platforms like us may become subject to or the target of increased litigation and additional government and regulatory scrutiny. Regardless of the outcome, any such matters could adversely affect our business, operating results, and financial condition because of legal costs, diversion of management resources, reputational damage, and other factors.
If we cannot keep pace with rapid industry changes to provide new and innovative products and services, the use of our products and services, and consequently our net revenue, could decline, which could adversely affect our business, operating results, and financial condition.
Our industry has been characterized by many rapid, significant, and disruptive products and services in recent years. These include decentralized applications, DeFi, yield farming, NFTs, play-to-earn games, lending, staking and re-staking, token wrapping, network and governance tokens, innovative programs to attract customers such as transaction fee mining programs, initiatives to attract traders such as trading competitions, airdrops and giveaways, staking reward programs, “layer 2” blockchain networks, smart contract wallets, and novel cryptocurrency fundraising and distribution schemes, such as “initial exchange offerings.” We expect new services and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that we currently provide. For example, decentralized networks and other disruptive technologies such as generative AI may fundamentally alter the use of our products or services in unpredictable ways. We cannot predict the effects of new services and technologies on our business. However, our ability to grow our customer base and net revenue will depend heavily on our ability to innovate and create successful new products and services, both independently and in conjunction with third-party developers. In particular, developing and incorporating new products and services into our business may require substantial expenditures, take considerable time, and ultimately may not be successful. Any new products or services could fail to attract customers, generate revenue, or perform or integrate well with third-party applications and platforms. In addition, our ability to adapt and compete with new products and services may be inhibited by regulatory requirements and general uncertainty in the law, constraints by our financial institution partners and payment processors, third-party intellectual property rights, or other factors. Moreover, we must continue to enhance our technical infrastructure and other technology offerings to remain competitive and maintain a platform that has the required functionality, performance, capacity, security, and speed to attract and retain customers, including large, institutional, high-frequency and high-volume traders. As a result, we expect to incur significant costs and expenses to develop and upgrade our technical infrastructure to meet the evolving needs of the industry. Our success will depend on our ability to develop, scale, and incorporate new offerings and adapt to technological changes and evolving industry practices. If we are unable to do so in a timely or cost-effective manner, our ability to successfully compete, to retain existing customers, and to attract new customers may be impacted and our business, operating results, and financial condition could be adversely affected.
A particular crypto asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which could adversely affect our business, operating results, and financial condition.
The SEC and its staff have taken evolving positions as to whether a range of crypto assets, products and services fall within the definition of a “security” under the U.S. federal securities laws. Despite the SEC being the principal federal securities law regulator in the United States, whether or not an asset, product, or service is a security or constitutes a securities offering under federal securities laws is ultimately determined by a federal court. The legal test for determining whether any given crypto asset, product, or service is an investment contract security was set forth in the 1946 Supreme Court case SEC
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v. W.J. Howey Co. and whether any given crypto asset, product, or service is a note in the 1990 Supreme Court case Reves v. Ernst & Young. The legal tests for determining whether any given crypto asset, product, or service is a security requires a highly complex, fact-driven analysis. Accordingly, whether any given crypto asset, product or service would be ultimately deemed by a federal court to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed a “security” or “securities offering” under applicable laws. The SEC generally does not provide advance guidance or confirmation on its assessment of the status of any particular crypto asset, product, or service as a security. Furthermore, in our view, statements by the SEC and its staff have appeared contradictory at times. It is also possible that the change in the governing administration and the appointment of new SEC commissioners will substantially impact the approach to enforcement by the SEC and its staff.
The SEC has also brought enforcement actions and entered into settlements with numerous industry participants alleging that certain digital assets are securities. In 2025, the SEC dismissed many of those enforcement actions. These statements, framework and enforcement actions are not rules or regulations of the SEC and are not binding on the SEC. As noted above, whether any given crypto asset, product or service would be ultimately deemed by a federal court to be a security is uncertain and difficult to predict. Moreover, the SEC and the Commodities Futures Trading Commission (the “CFTC”) and their senior officials have, at times, taken conflicting positions in speeches and enforcement actions as to whether a particular crypto asset is a security or commodity. In January 2025, the SEC launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. While newly formed, its goal is to clarify federal securities laws for crypto, recommend practical policies, foster innovation, and protect investors. Furthermore, on November 12, 2025, SEC Chairman Atkins delivered an address at the Federal Reserve Bank of Philadelphia, in which he highlighted the view that most crypto assets are not securities, and that the SEC would coordinate with the CFTC on a token taxonomy that includes “digital commodities.”
Several foreign jurisdictions have taken a broad-based approach to classifying crypto assets, products and services as “securities,” while other foreign jurisdictions have adopted a narrower approach. As a result, certain crypto assets, products or services may be deemed to be a “security” under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of crypto assets, products or services as “securities.”
The classification of a crypto asset, product or service as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, and clearing, as applicable, of such assets, products or services. For example, a crypto asset, product or service that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in crypto assets, products or services that are securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade crypto assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an ATS in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. Foreign jurisdictions may have similar licensing, registration, and qualification requirements.
We have policies and procedures to analyze whether each crypto asset that we seek to facilitate trading on Coinbase Spot Market, as well as our products and services, could be deemed to be a “security” under applicable laws. Our policies and procedures do not constitute a legal standard, but rather represent our company-developed model, which we use to make a risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed a “security” under applicable laws.
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Because Coinbase Spot Market, Coinbase Prime and Coinbase app are not registered or licensed with the SEC or foreign authorities as a broker-dealer, national securities exchange, or ATS (or foreign equivalents), we only permit trading of those crypto assets, and offer products and services, for which we determine there are reasonably strong arguments to conclude that the crypto asset, product or service is not a security. We believe that our process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent application of available legal guidance on crypto assets, products and services and to facilitate informed risk-based business judgment. In addition, as we shared in our petition for SEC rulemaking, we remain open to registering or relying on an exemption to facilitate and offer the sale of securities involving crypto assets. We recognize that the application of securities laws to the specific facts and circumstances of crypto assets, products and services may be complex and subject to change, and that a listing determination does not guarantee any conclusion under the U.S. federal securities laws. Regardless of our conclusions, we have been, and could in the future be, subject to legal or regulatory action in the event the SEC or a state or foreign regulatory authority were to assert, or a court were to determine, that a supported crypto asset, product or service offered, sold, or traded on our platform or a product or service that we offer is a “security” under applicable laws. There can be no assurance that we will properly characterize over time any given crypto asset, product or service offering as a security or non-security, or that the SEC, foreign regulatory authority, or a court having final determinative authority on the topic, if the question was presented to it, would agree with our assessment. We expect our risk assessment policies and procedures to continuously evolve to take into account case law, legislative developments, facts, and developments in technology.
If an applicable regulatory authority or a court, in either case having final determinative authority on the topic, were to determine that a supported crypto asset, product or service currently offered, sold, or traded on our platform is a security, we would not be able to offer such crypto asset for trading, or product or service on our platform, until we are able to do so in a compliant manner. A determination by the SEC, a state or foreign regulatory authority, or a court that an asset that we currently support for trading on our platform, or product or service that we offer on our platform, constitutes a security may result in us removing that crypto asset from or ceasing to offer that product or service on our platform, and may also result in us determining that it is advisable to remove assets from our platform, or to cease offering products and services on our platform, that have similar characteristics to the asset, product or service that was alleged or determined to be a security. Alternatively, we may determine not to remove a particular crypto asset from Coinbase Spot Market or to continue to offer a product or service on our platform even if the SEC or another regulator alleges that the crypto asset, product or service is a security, pending a final judicial determination as to that crypto asset, product or service’s proper characterization, and the fact that we waited for a final judicial determination would generally not preclude penalties or sanctions against us for our having previously made our platform available for trading that crypto asset or offering that product or service on our platform without registering as a national securities exchange or ATS or registering tokens that we may issue, such as our cbETH and cbBTC tokens or our staking services, with the SEC. As such, we could be subject to judicial or administrative sanctions for failing to offer or sell the crypto asset, product or service in compliance with the registration requirements, or for acting as a broker, dealer, or national securities exchange without appropriate registration. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm. Customers that traded such supported crypto asset on our platform and suffered trading losses could also seek to rescind a transaction that we facilitated on the basis that it was conducted in violation of applicable law, which could subject us to significant liability. We may also be required to cease facilitating transactions in the supported crypto asset other than via our licensed subsidiaries, which could negatively impact our business, operating results, and financial condition. Additionally, the SEC has brought and may in the future bring enforcement actions against other industry participants and their product offerings and services that may cause us to modify or discontinue a product offering or service on our platform. If we were to modify or discontinue any product offering or service or remove any assets from trading on our platform for any reason, our decision may be unpopular with users, may reduce our ability to attract and retain customers (especially if similar products, services or such assets continue to be offered or traded on unregulated exchanges, which includes many of our competitors), and could adversely affect our business, operating results, and financial condition.
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Further, if Bitcoin, Ethereum, stablecoins or any other supported crypto asset is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such supported crypto asset. For instance, all transactions in such supported crypto asset would have to be registered with the SEC or other foreign authority, or conducted in accordance with an exemption from registration, which could severely limit its liquidity, usability and transactability. Moreover, the networks on which such supported crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto asset to be traded, cleared, and custodied as compared to other crypto assets that are not considered to be securities. Specifically, even if transactions in such supported crypto asset were registered with the SEC or conducted in accordance with an exemption from registration, the current intermediary-based framework for securities trading, clearance and settlement is not consistent with the operations of the crypto asset market. For example, the SEC has not permitted public permissionless blockchain-based clearance and settlement systems for securities.
We currently rely on third-party service providers for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our customers.
We rely on third parties in connection with many aspects of our business, including payment processors, financial institutions, and payment gateways to process transactions; cloud computing services and data centers that provide facilities, infrastructure, smart contract development, website functionality and access, components, and services, including databases and data center facilities and cloud computing; as well as third parties that provide outsourced customer service, compliance support and product development functions, which are critical to our operations. Because we rely on third parties to provide these services and to facilitate certain of our business activities, we face increased operational risks. We do not directly manage the operation of any of these third parties, including their data center facilities that we use. These third parties may be subject to financial, legal, regulatory, and labor issues, cybersecurity incidents, data theft or loss, break-ins, computer viruses or vulnerabilities in their code, denial-of-service attacks, sabotage, acts of vandalism, loss, disruption, or instability of third-party financial institution relationships, privacy breaches, service terminations, disruptions, interruptions, and other misconduct. They are also vulnerable to damage or interruption from human error, power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, tornadoes, pandemics and similar events. In addition, these third parties may breach their agreements with us, disagree with our interpretation of contract terms or applicable laws and regulations, refuse to continue or renew these agreements on commercially reasonable terms or at all, fail or refuse to process transactions or provide other services adequately, take actions that degrade the functionality of our services, impose additional costs or requirements on us or our customers, or give preferential treatment to competitors. There can be no assurance that third parties that provide services to us or to our customers on our behalf will continue to do so on acceptable terms, or at all. If any third parties do not adequately or appropriately provide their services or perform their responsibilities to us or our customers on our behalf, such as if third-party service providers close their data center facilities without adequate notice, are unable to restore operations and data, fail to perform as expected, or experience other unanticipated problems, we may be unable to procure alternatives in a timely and efficient manner and on acceptable terms, or at all, and we may be subject to business disruptions, losses or costs to remediate any of the deficiencies, customer dissatisfaction, reputational damage, legal or regulatory proceedings, or other adverse consequences which could adversely affect our business, operating results, and financial condition.
Loss of a critical financial institution or insurance relationship could adversely affect our business, operating results, and financial condition.
We rely on financial institution relationships to provide our platform and custodial services. In particular, customer cash holdings on our platform are held with one or more financial institutions. As a registered money services business with FinCEN under the Bank Secrecy Act, as amended by the USA
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PATRIOT Act of 2001, and its implementing regulations enforced by FinCEN, or collectively, the BSA, a licensed money transmitter in a number of U.S. states and territories, a licensee under NYDFS’s Virtual Currency Business Activity regime, commonly referred to as a BitLicense, a licensed electronic money institution and a registered Virtual Asset Service Provider with the U.K. Financial Conduct Authority, a licensed electronic money institution under the Central Bank of Ireland, a MiCA-licensed crypto asset service provider supervised by the Commission de Surveillance du Secteur Financier in Luxembourg, and a limited purpose trust company chartered by the NYDFS, our financial institution partners view us as a higher risk customer for purposes of their anti-money laundering programs. We may face difficulty establishing or maintaining such relationships due to instability in the global banking system, increasing regulatory uncertainty and scrutiny, or our partners’ policies and some prior partners have terminated their relationship with us or have limited access to services. The loss of these partners or the imposition of operational restrictions by these partners and the inability for us to utilize other redundant financial institutions may result in a disruption of business activity as well as regulatory risks. In addition, as a result of the myriad of regulations or the risks of crypto assets generally, financial institutions in the United States and globally may decide to not provide, or be prohibited from providing, account, custody, or other financial services to us or our industry generally. Further, we have existing redundancies in U.S. and global financial institutions that work with crypto companies with which we engage.
However, if these financial institutions are subject to bank resolution or failure, or limit or end their crypto market activity, or if such relationships become severely limited or unavailable to crypto market participants in a certain country, there could be temporary delays in or unavailability of services in such country that are critical to our or our partners’ operations, developers or customers, a further limit on available vendors, reduced quality in services we, our partners, our developers or our customers are able to obtain, and a general disruption to the onchain economy, potentially leading to reduced activity on our platform which could adversely affect our business, operating results, and financial condition. For example, while our business and operations have not been materially affected by the closures of Silvergate Capital Corp. and Signature Bank and the cessation of their real-time fiat currency payment networks in March 2023, large industry participants, including us and our institutional customers, experienced a temporary inability to transfer fiat currencies outside of standard business hours.
We also rely on insurance carriers to insure customer losses resulting from a breach of our physical security, cybersecurity, or by employee or third party theft and hold surety bonds as required for compliance with certain of our licenses under applicable state laws. Our ability to maintain crime, specie, and cyber insurance, as well as surety bonds, is subject to the insurance carriers’ ongoing underwriting criteria and our inability to obtain and maintain appropriate insurance coverage could cause a substantial business disruption, adverse reputational impact, inability to compete with our competitors, and regulatory scrutiny, and could adversely affect our business, operating results, and financial condition.
Any significant disruption in our products and services, in our information technology systems, or in any of the blockchain networks we support, could result in a loss of customers or funds and adversely affect our brand, reputation, business, operating results, and financial condition.
Our reputation and ability to attract and retain customers and grow our business depends on our ability to operate our service at high levels of reliability, scalability, and performance, including the ability to process and monitor, on a daily basis, a large number of transactions that occur at high volume and frequencies across multiple systems. Our platform, the ability of our customers to trade, and our ability to operate at a high level, are dependent on our ability to access the blockchain networks underlying the supported crypto assets, for which access is dependent on our systems’ ability to access the internet. Further, the successful and continued operations of such blockchain networks will depend on a network of computers, miners, or validators, and their continued operations, all of which may be impacted by service interruptions.
Our systems, the systems of our third-party service providers and partners, and certain crypto asset and blockchain networks have experienced from time to time, and may experience in the future service interruptions or degradation because of hardware and software defects or malfunctions, distributed
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denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events. In addition, extraordinary Trading Volumes or site usage could cause our computer systems to operate at an unacceptably slow speed or even fail. Some of our systems, including systems of companies we have acquired, or the systems of our third-party service providers and partners are not fully redundant, and our or their disaster recovery planning may not be sufficient for all possible outcomes or events.
If any of our systems, or those of our third-party service providers, are disrupted for any reason, our products and services may fail, resulting in unanticipated disruptions, slower response times and delays in our customers’ trade execution and processing, failed settlement of trades, incomplete or inaccurate accounting, recording or processing of trades, unauthorized trades, loss of customer information, increased demand on limited customer support resources, customer claims, complaints with regulatory organizations, lawsuits, or enforcement actions. Further, when these disruptions occur, we have in the past, and may in the future, fulfill customer transactions using inventory to prevent adverse user impact and limit detrimental impact to our operating results. A prolonged interruption in the availability or reduction in the availability, speed, or functionality of our products and services could harm our business. Significant or persistent interruptions in our services could cause current or potential customers or partners to believe that our systems are unreliable, leading them to switch to our competitors or to avoid or reduce the use of our products and services, and could permanently harm our reputation and brands. Moreover, to the extent that any system failure or similar event results in damages to our customers or their business partners, these customers or partners could seek significant compensation or contractual penalties from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. Problems with the reliability or security of our systems would harm our reputation and the cost of remedying these problems could negatively affect our business, operating results, and financial condition.
Because we are a regulated financial institution in certain jurisdictions, interruptions have resulted and in the future may result in regulatory scrutiny, and significant or persistent interruptions could lead to significant fines and penalties, and mandatory and costly changes to our business practices, and ultimately could cause us to lose existing licenses or financial institution relationships that we need to operate or prevent or delay us from obtaining additional licenses that may be required for our business.
In addition, we are continually improving and upgrading our information systems and technologies. Implementation of new systems and technologies is complex, expensive, time-consuming, and may not be successful. If we fail to timely and successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies, or if such systems and technologies do not operate as intended, it could adversely affect our internal controls (including internal controls over financial reporting), and our business, operating results, and financial condition.
Our failure to securely store and manage our and our customers’ fiat currencies and crypto assets could adversely affect our business, operating results, and financial condition.
We hold cash and store crypto assets on behalf of our customers and hold fiat and crypto for corporate investment and operating purposes. In addition, following the acquisition of Coinbase Asset Management, formerly One River Digital Asset Management (“CBAM”), we additionally store an immaterial amount of cryptocurrencies at third-party custodians for asset management products. Further, following our acquisition of Deribit, certain amounts of cryptocurrencies are stored at third-party custodians to support trading activity on Deribit’s platform.
Securely storing customers’ cash and crypto assets is integral to the trust we build with our customers. We believe our policies, procedures, operational controls and controls over financial reporting, protect us from material risks surrounding the storing of these assets and conflicts of interest. Our controls over financial reporting include among others, controls over the segregation of corporate crypto
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asset balances from customer crypto asset balances, controls over the processes of customer crypto asset deposits and customer crypto asset withdrawals and corporate and customer fiat balances. Our financial statements and disclosures, as a whole, are available through periodic filings on a quarterly basis, and compliant with annual audit requirements of Article 3 of Regulation S-X.
We hold cash at financial institutions in accounts designated as for the benefit of our customers. We have also entered into partnerships or joint ventures with third parties, such as with Circle, where we or our partners receive and hold customer funds. Our and our financial partners’ abilities to manage and accurately hold customer cash and cash we hold for our own investment and operating purposes requires a high level of internal controls. We are limited in our ability to influence or manage the controls and processes of third-party partners or vendors and may be dependent on our partners’ and vendors’ operations, liquidity and financial condition to manage these risks. As we maintain, grow and expand our product and services offerings we also must scale and strengthen our internal controls and processes, and monitor our third-party partners’ and vendors’ ability to similarly scale and strengthen. Failure to do so could adversely affect our business, operating results, and financial condition. This is important both to the actual controls and processes and the public perception of the same.
Any inability by us to maintain our procedures, perceived or otherwise, could harm our business, operating results, and financial condition. Accordingly, we take steps to ensure customer cash is always secure. Customer cash and crypto asset balances are maintained through our internal ledgering processes. Customer cash is maintained in segregated Company financial institution accounts that are held for the exclusive benefit of customers with our financial institution partners or in government money market funds or other permissible investments. We store crypto assets using proprietary technology and operational processes. Crypto assets are not insured or guaranteed by any government or government agency, however we have worked hard to securely store our customers’ crypto assets and our own crypto assets for investment and operational purposes with legal and operational protections.
Any material failure by us or our partners to maintain the necessary controls, policies, procedures or to manage the crypto assets we hold for our own investment and operating purposes could also adversely affect our business, operating results, and financial condition. Further, any material failure by us or our partners to maintain the necessary controls or to manage customer crypto assets and funds appropriately and in compliance with applicable regulatory requirements could result in reputational harm, litigation, regulatory enforcement actions, significant financial losses, lead customers to discontinue or reduce their use of our and our partners’ products, and result in significant penalties and fines and additional restrictions, which could adversely affect our business, operating results, and financial condition. Moreover, because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors. This may result in customers finding our custodial services more risky and less attractive and any failure to increase our customer base, discontinuation or reduction in use of our platform and products by existing customers as a result could adversely affect our business, operating results, and financial condition. Additionally, following the acquisition of CBAM, some of our asset management products hold customer assets at third-party custodians with their own bankruptcy protection procedures.
We place great importance on securely storing crypto assets we custody and keeping them bankruptcy remote from our general creditors, and in June 2022 we updated our Retail User Agreement to clarify the applicability of Uniform Commercial Code (“UCC”) Article 8 to custodied crypto assets – the same legal protection that our institutional custody and prime broker clients also rely upon. UCC Article 8 provides that financial assets held by Coinbase are not property of Coinbase and not subject to the claims of its general creditors. In light of UCC Article 8, we believe that a court would not treat custodied crypto assets as part of our general estate; however, due to the novelty of crypto assets, courts have not yet considered this type of treatment for custodied crypto assets. Our MiCA-authorized entity in the E.U. securely stores client assets in dedicated, segregated custody vaults with separate books-and-records
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from Coinbase’s own and other client funds, and uses tightly controlled settlement flows to preserve access to global liquidity and fast execution.
We deposit, transfer, and custody customer cash and crypto assets in multiple jurisdictions. In each instance, we require bank-level security encryption to store customers’ assets for our wallet and storage systems, as well as our financial management systems related to such custodial functions. Our security technology is designed to prevent, detect, and mitigate inappropriate access to our systems, by internal or external threats. We believe we have developed and maintained administrative, technical, and physical measures designed to comply with applicable legal requirements and industry standards. However, it is nevertheless possible that hackers, employees or service providers acting contrary to our policies, or others could circumvent these measures to improperly access our systems or documents, or the systems or documents of our business partners, agents, or service providers, and improperly access, obtain, or misuse customer crypto assets and funds. The methods used to obtain unauthorized access, disable, or degrade service or sabotage systems are also constantly changing and evolving and may be difficult to anticipate or detect for long periods of time. Certain of our customer contracts do not limit our liability with respect to security breaches and other security-related matters and our insurance coverage for such impropriety is limited and may not cover the extent of loss nor the nature of such loss, in which case we may be liable for the full amount of losses suffered, which could be greater than all of our assets. Our ability to maintain insurance is also subject to the insurance carriers’ ongoing underwriting criteria. Any loss of customer cash or crypto assets could result in a subsequent lapse in insurance coverage, which could cause a substantial business disruption, adverse reputational impact, inability to compete with our competitors, and regulatory investigations, inquiries, or actions. Additionally, transactions undertaken through our websites or other electronic channels may create risks of fraud, hacking, unauthorized access or acquisition, and other deceptive practices. Any security incident resulting in a compromise of customer assets could result in substantial costs to us and require us to notify impacted individuals, and in some cases regulators, of a possible or actual incident, expose us to regulatory enforcement actions, including substantial fines, limit our ability to provide services, subject us to litigation, significant financial losses, damage our reputation, and adversely affect our business, operating results, financial condition, and cash flows.
The theft, loss, or destruction of private keys required to access any crypto assets held in custody for our own account or for our customers may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any crypto assets, it could cause regulatory scrutiny, reputational harm, and other losses.
Crypto assets are generally controllable only by the possessor of the unique private key relating to the digital wallet in which the crypto assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be secured and kept private in order to prevent a third party from accessing the crypto assets held in such a wallet. To the extent that any of the private keys relating to our wallets containing crypto assets held for our own account or for our customers is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the crypto assets held in the related wallet. Further, we cannot provide assurance that our wallets will not be hacked or compromised. Crypto assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or hack or other compromise of, digital wallets used to store our customers’ crypto assets could adversely affect our customers’ ability to access or sell their crypto assets, require us to reimburse our customers for their losses, and subject us to significant financial losses in addition to losing customer trust in us and our products. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely affect our business, operating results, and financial condition.
To mitigate the risks associated with the loss or theft of keys, we utilize both hot wallets and cold wallets in our custodial solutions. We actively manage wallet balances and generally seek to hold no more than 2% of custodied assets in hot wallets at any given time. Cold wallet private key materials are
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stored and secured at facilities within the United States and internationally. We store the substantial majority of our own crypto asset holdings utilizing the same storage solutions that we provide to our customers. In limited cases, we use storage solutions not offered to our customers to store immaterial amounts of crypto held for corporate purposes outside of our core custodial product offerings. Additionally, both Deribit and our CBAM offering utilize both Coinbase custody services and third parties as custodians.
At all times, we hold corporate assets in excess of the total amount of assets held in our hot wallets. Similar to most financial institutions, the total customer assets on our platform, such as those assets held in cold storage, are substantially more than our corporate assets and available insurance. While we have for years maintained, and continue to maintain, a commercial crime insurance policy, which has a one-year term without automatic renewals, in the event of a loss from our cold wallets, our assets may be insufficient to cover amounts that exceed our insurance coverage. We may be liable for such uninsured losses where we are required to reimburse customers, and such liability could adversely affect our business, operating results, and financial condition.
Other Risks Related to Our Business and Financial Position
If we fail to retain existing customers or add new customers, or if our customers decrease their level of engagement with our products, services and platform, our business, operating results, and financial condition may be significantly harmed.
Our success depends on our ability to retain existing customers and attract new customers, including developers, to increase engagement with our products, services, and platform. To do so, we must continue to offer leading technologies and ensure that our products and services are secure, reliable, and engaging. We must also expand our products and services, and offer competitive prices in an increasingly crowded and price-sensitive market. There is no assurance that we will be able to continue to do so, that we will be able to retain our current customers or attract new customers, or keep our customers engaged. Any number of factors can negatively affect customer retention, growth, and engagement, including if:
•customers increasingly engage with competing products and services, including products and services that we are unable to offer due to regulatory reasons;
•we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received;
•we fail to support new and in-demand crypto assets or if we elect to support crypto assets with negative reputations;
•there are changes in sentiment about the quality or usefulness of our products and services or concerns related to privacy, security, fiat pegging or other factors;
•there are adverse changes in our products and services that are mandated by legislation, regulatory authorities, or litigation;
•customers perceive the crypto assets on our platform to be bad investments, or experience significant losses in investments made on our platform;
•technical or other problems prevent us from delivering our products and services with the speed, functionality, security, and reliability that our customers expect;
•cybersecurity incidents, employee or service provider misconduct, or other unforeseen activities cause losses to us or our customers, including losses to assets held by us on behalf of our customers;
•modifications to our pricing model or modifications by competitors to their pricing models;
•we fail to provide adequate customer service;
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•regulatory and governmental bodies in countries that we target for expansion express negative views towards crypto asset trading platforms and, more broadly, our industry; or
•we or other companies or high-profile figures in our industry are the subject of adverse media reports or other negative publicity.
From time to time, certain of these factors have negatively affected customer retention, growth, and engagement to varying degrees. If we are unable to maintain or increase our customer base and customer engagement, our revenue and financial results may be adversely affected. Any decrease in user retention, growth, or engagement could render our products and services less attractive to customers and lead to a decrease in revenue, and our business, operating results, and financial condition could be adversely affected. If our customer growth rate slows or declines, we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive growth of revenue.
Our operating expenses may increase in the future and we may not be successful in increasing our revenue to sufficiently offset these higher expenses, which could impact our ability to achieve profitability or positive cash flow from operations on a consistent basis and cause our business, operating results, and financial condition to be adversely affected.
Our operating expenses may increase in the future as we continue to grow our business. While we consistently evaluate opportunities to drive efficiency, we cannot guarantee that these efforts will be successful or that we will not need to increase operating expenditures in the future. Our operations may prove more expensive than we currently anticipate, and we may not succeed in increasing our net revenue sufficiently to offset these higher expenses. Additionally, our revenue growth may be negatively impacted by, among other things, reduced demand for our offerings, increased competition, adverse macroeconomic conditions, any decrease in the growth or size of our industry, regulatory uncertainty or scrutiny, changes that impact our ability to offer certain products or services, or failure of new products and services to gain market adoption. As a result, we cannot be certain that we will be able to achieve profitability or achieve positive operating cash flow on any quarterly or annual basis. If we are unable to effectively manage these risks and difficulties as we encounter them, our business, operating results, and financial condition may suffer.
If we do not effectively manage our growth, including through acquisitions and by maintaining and improving our systems and processes, our business, operating results, and financial condition could be adversely affected.
We have experienced, and may experience in the future, periods of significant growth. To effectively manage and capitalize on our growth periods, we will need to manage headcount, capital, and processes efficiently while making investments such as expanding our information technology and financial, operating, and administrative systems and controls, and such initiatives could strain our resources. We could experience operating difficulties in managing our business as it expands across numerous jurisdictions, including difficulties in hiring, training, managing and retaining a remote and evolving employee base, as well as challenges integrating acquired businesses, technologies, and personnel. If we do not adapt or scale to meet these evolving challenges, or if we fail to successfully integrate acquisitions, we may experience erosion to our brand, the quality of our products and services may suffer, and our company culture may be harmed. Moreover, the failure of our systems and processes could undermine our ability to provide accurate, timely, and reliable reports on our financial and operating results, including the financial statements provided herein, and could impact the effectiveness of our internal controls over financial reporting. In addition, our systems and processes may not prevent or detect all errors, omissions, or fraud. Any of the foregoing operational failures could lead to noncompliance with laws and regulations, loss of operating licenses or other authorizations, or loss of financial institution relationships that could substantially impair or even suspend company operations.
Successful implementation of our growth strategy will also require significant expenditures before any substantial associated revenue is generated and we cannot guarantee that these increased investments
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will result in corresponding and offsetting revenue growth. For example, we may pay substantial premiums for acquired businesses and there can be no assurance that anticipated synergies or benefits will be realized on the timeline expected, or at all. Because we have a limited history operating our business at its current scale, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth. Our limited operating experience at this scale, combined with the rapidly evolving and volatile nature of the crypto asset market in which we operate, and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue.
Additionally, from time to time, we have realigned our resources and talent to meet evolving business needs. This has previously included layoffs and workforce reductions aimed at cutting costs, improving efficiency, and responding to economic shifts. If there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions. Failure to manage any growth or any scaling back of our operations could have an adverse effect on our business, operating results, and financial condition.
Our strategy and focus on delivering high-quality, compliant, easy-to-use, and secure crypto-related financial services may not maximize short-term or medium-term financial results.
We have taken, and expect to continue to take, actions that we believe are in the best interests of our customers and the long-term interests of our business, even if those actions do not necessarily maximize short-term or medium-term results. These include expending significant managerial, technical, and legal efforts on complying with laws and regulations that are applicable to our products and services and ensuring that our products are secure. We also focus on driving long-term engagement with our customers through innovation and developing new industry-leading products and technologies. These decisions may not be consistent with the short-term and medium-term expectations of our shareholders and may not produce the long-term benefits that we expect, which could have an adverse effect on our business, operating results, and financial condition.
Laws and regulations regarding conflicts of interest associated with the use of predictive data analytics, digital engagement practices, and similar technologies, if adopted and found to be applicable to our business, may require us to modify, limit, or discontinue our use of certain technologies and features contained within our products and services and may impact the way that we interact with existing and prospective customers, which could adversely affect our business, operating results, and financial condition.
Our products, services and educational offerings incorporate a holistic, customer-centric set of digital engagement practices, including educational content and notifications, which are designed, in part, to promote financial literacy and awareness and to provide customers with guidance and information to help them make better informed decisions about their crypto activity. Certain jurisdictions have proposed or are considering laws and regulations regarding conflicts of interest associated with the use of predictive data analytics, digital engagement practices, and similar technologies by broker-dealers, investment advisers and/or other securities market participants. If adopted and found to apply to our business, such laws or regulations may impose obligations on us that may require us to modify, limit, or discontinue our use of certain technologies and features used in connection with our products and services and/or to change the way that we interact with existing and prospective customers, which could adversely affect our business, operating results, and financial condition.
Because our long-term success depends, in part, on our ability to expand our sales to customers outside the United States, our business is susceptible to risks associated with international operations.
We currently have subsidiaries in the United States and abroad. We plan to enter into or increase our presence in additional markets around the world. We have a limited operating history outside the United
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States, and our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to particular challenges of supporting a growing business in an environment of diverse cultures, languages, customs, tax laws, legal systems, alternate dispute systems, and regulatory systems. As we continue to expand our business and customer base outside the United States, we will be increasingly susceptible to risks associated with international operations. These risks and challenges include:
•difficulty establishing and managing international operations and the increased operations, travel, infrastructure, including establishment of local customer service operations, local infrastructure to manage supported cryptocurrency or other financial instruments and corresponding books and records, and legal and regulatory compliance costs associated with different jurisdictions;
•the need to vary pricing and margins to effectively compete in international markets;
•the need to adapt and localize our products and services for specific countries, including offering services and support in local languages;
•compliance with multiple, potentially conflicting and changing governmental laws and regulations across different jurisdictions;
•compliance with U.S. and foreign laws designed to combat money laundering and the financing of terrorist activities, as well as economic and trade sanctions;
•the need to comply with a greater set of law enforcement inquiries including those subject to mutual legal assistance treaties;
•compliance with the extraterritorial reach of any U.S. regulatory rules, including those imposed by the CFTC, SEC, FinCEN or other U.S. based regulators;
•difficulties obtaining and maintaining required licensing from regulators in foreign jurisdictions;
•competition with companies that have greater experience in the local markets, pre-existing relationships with customers in these markets or are subject to less regulatory requirements in local jurisdictions;
•varying levels of payments and blockchain technology adoption and infrastructure, and increased network, payment processing, banking, and other costs;
•compliance with anti-bribery laws, including compliance with the Foreign Corrupt Practices Act, the U.K. Bribery Act 2010, and other local anticorruption laws;
•difficulties collecting in foreign currencies and associated foreign currency exposure;
•difficulties holding, repatriating, and transferring funds held in offshore bank accounts;
•difficulties adapting to foreign customary commercial practices, enforcing contracts and collecting accounts receivable, longer payment cycles and other collection difficulties;
•restrictions on crypto asset trading;
•stringent local labor laws and regulations;
•potentially adverse tax developments and consequences;
•antitrust and competition regulations; and
•regional economic and political conditions.
We may not be able to penetrate or successfully operate in the markets we choose to enter. In addition, we may incur significant expenses as a result of our international expansion, and we may not be successful. We may face limited brand recognition in certain parts of the world that could lead to non-acceptance or delayed acceptance of our products and services by customers in new markets. We may also face challenges in complying with local laws and regulations. For example, we may be subject to
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regulatory frameworks that are evolving, have not undergone extensive rulemaking, and could result in uncertain outcomes for our customers and/or our ability to offer competitive products in the broader onchain economy. Our failure to successfully manage these risks could harm our international operations and have an adverse effect on our business, operating results, and financial condition.
Disputes with our customers could adversely affect our brand, reputation, business, operating results, and financial condition.
From time to time we have been, and may in the future be, subject to claims and disputes with our customers with respect to our products and services, such as regarding the execution and settlement of crypto asset trades, fraudulent or unauthorized transactions, account takeovers, deposits and withdrawals of crypto assets, failures or malfunctions of our systems and services, or other issues relating to our products and services. For example, during periods of heavy Trading Volumes, we have received increased customer complaints. Additionally, the ingenuity of criminal fraudsters, combined with many consumer users’ susceptibility to fraud, may cause our customers to be subject to ongoing account takeovers and identity fraud issues. While we have taken measures to detect and reduce the risk of fraud, there is no guarantee that they will be successful and, in any case, require continuous improvement and optimization for continually evolving forms of fraud to be effective. There can be no guarantee that we will be successful in detecting and resolving these disputes or defending ourselves in any of these matters, and any failure may result in impaired relationships with our customers, damage to our brand and reputation, and substantial fines and damages. In some cases, the measures we have implemented to detect and deter fraud have led to poor customer experiences, including indefinite account inaccessibility for some of our customers, which increases our customer support costs and can compound damages. We could incur significant costs in compensating our customers, such as if a transaction was unauthorized, erroneous, or fraudulent. We could also incur significant legal expenses resolving and defending claims, even those without merit. To the extent we are found to have failed to fulfill our regulatory obligations, we could also lose our authorizations or licenses or become subject to conditions that could make future operations more costly, impair our ability to grow, and adversely affect our business, operating results, and financial condition. We currently are, or may in the future become, subject to investigation and enforcement action by state, federal, and international consumer protection agencies, including the Consumer Financial Protection Bureau, the Federal Trade Commission (the “FTC”), state agencies and attorneys general in the United States, the U.K. Financial Conduct Authority, the U.K. Financial Ombudsman Service, and the U.K. Office of Fair Trading, each of which monitors customer complaints against us and, from time to time, escalates matters for investigation and potential enforcement against us.
While certain of our customer agreements contain arbitration provisions with class action waiver provisions that may limit our exposure to consumer class action litigation, some federal, state, and foreign courts have refused or may refuse to enforce one or more of these provisions, and there can be no assurance that we will be successful in enforcing these arbitration provisions, including the class action waiver provisions, in the future or in any given case. Legislative, administrative, or regulatory developments may directly or indirectly prohibit or limit the use of pre-dispute arbitration clauses and class action waiver provisions. Any such prohibitions or limitations on or discontinuation of the use of such arbitration or class action waiver provisions could subject us to additional lawsuits, including additional consumer class action litigation, and significantly limit our ability to avoid exposure from consumer class action litigation.
We may suffer losses due to staking, delegating, and other related services we provide to our customers.
Certain supported crypto assets enable holders to earn rewards by participating in decentralized governance, bookkeeping and transaction confirmation activities on their underlying blockchain networks, such as through staking activities, including staking through validation, delegating, and baking. We currently provide and expect to continue to provide such services for certain supported crypto assets to our customers in order to enable them to earn rewards based on crypto assets that we hold on their
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behalf. For instance, as a service to customers and at their instruction, we operate staking nodes on certain blockchain networks utilizing customers’ crypto assets and pass through the rewards received to those customers, less a service fee. In other cases, upon customers’ instructions, we may delegate our customers’ assets to third-party service providers that are unaffiliated with us. Some networks may further require customer assets to be transferred into smart contracts on the underlying blockchain networks not under our or anyone’s control. If our validator, any third-party service providers, or smart contracts fail to behave as expected, suffer cybersecurity attacks, experience security issues, or encounter other problems, our customers’ assets may be irretrievably lost. In addition, certain blockchain networks dictate requirements for participation in the relevant decentralized governance activity, and may impose penalties, or “slashing,” if the relevant activities are not performed correctly, such as if the staker, delegator, or baker acts maliciously on the network, “double signs” any transactions, or experience extended downtimes. If we or any of our service providers are slashed by the underlying blockchain network, our customers’ assets may be confiscated, withdrawn, or burnt by the network, resulting in losses for which we may be responsible. Furthermore, certain types of staking require the payment of transaction fees on the underlying blockchain network and such fees can become significant as the amount and complexity of the transaction grows, depending on the degree of network congestion and the price of the network token. If we experience a high volume of such staking requests from our customers on an ongoing basis, we could incur significant costs. Any penalties or slashing events could damage our brand and reputation, cause us to suffer financial losses, discourage existing and future customers from utilizing our products and services, and adversely affect our business, operating results, and financial condition.
We may not be able to generate sufficient cash to service our debt and other obligations, including our obligations under the 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and Senior Notes.
Our ability to make payments on our indebtedness, including the 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and Senior Notes, and our other obligations will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to attain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including each series of the 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and Senior Notes, and other obligations.
If we are unable to service our debt and other obligations from cash flows, we may need to refinance or restructure all or a portion of our debt obligations prior to maturity. Our ability to refinance or restructure our debt and other obligations will depend upon the condition of the capital markets and our financial condition at such time. Any refinancing or restructuring could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. Statutory, contractual or other restrictions may also limit our subsidiaries’ ability to pay dividends or make distributions, loans or advances to us. For these reasons, we may not have access to any assets or cash flows of our subsidiaries to make interest and principal payments on each series of the 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and Senior Notes.
If our cash flows are insufficient to fund our debt and other obligations and we are unable to refinance or restructure these obligations on commercially reasonable terms or at all, we could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell material assets or operations to meet our debt and other obligations. We cannot assure you that we would be able to implement any of these alternative measures on satisfactory terms or at all or that the proceeds from such alternatives would be adequate to meet any debt or other obligations when due. If it becomes necessary to implement any of these alternative measures, our business, operating results, and financial condition could be adversely affected.
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We have a substantial amount of indebtedness and other obligations, which could adversely affect our financial position and prevent us from fulfilling our obligations under the 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and Senior Notes.
We have a substantial amount of indebtedness and other obligations. As of December 31, 2025, we had approximately $7.28 billion in aggregate principal amount of outstanding long-term indebtedness (excluding crypto asset borrowings), which includes $1.74 billion of our Senior Notes, $1.27 billion of our 2026 Convertible Notes, $1.50 billion of our 2029 Convertible Notes, $1.27 billion of our 2030 Convertible Notes, and $1.50 billion of our 2032 Convertible Notes.
Our substantial indebtedness and other obligations may:
•make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032, Convertible Notes, Senior Notes, and our other obligations;
•limit our ability to use our cash flow for working capital, capital expenditures, acquisitions, or other general business purposes;
•increase our cost of borrowing;
•require us to use a substantial portion of our cash flow from operations to make debt service payments and pay our other obligations when due;
•limit our flexibility to plan for, or react to, changes in our business and industry;
•place us at a competitive disadvantage compared to our less leveraged competitors; and
•increase our vulnerability to the impact of adverse economic and industry conditions, including changes in interest rates and foreign exchange rates.
We provide secured loans to our customers, which exposes us to credit risks and may cause us to incur financial or reputational harm.
We provide commercial loans to qualified customers secured by their fiat or crypto asset holdings, including USDC, on our platform, which exposes us to the risk of our borrowers’ inability to repay such loans. In addition, such activity results in us being subject to certain lending laws and regulations in the applicable jurisdiction and as a result we may be subject to additional regulatory scrutiny. In the future we may enter into credit arrangements with financial institutions to obtain more capital. Any termination or interruption in the financial institutions’ ability to lend to us could interrupt our ability to provide capital to qualified customers to the extent we rely on such credit lines to continue to offer or to grow such products. Further, our credit approval process, pricing, loss forecasting, and scoring models may contain errors or may not adequately assess creditworthiness of our borrowers, or may be otherwise ineffective, resulting in incorrect approvals or denials of loans. It is also possible that loan applicants could provide false or incorrect information. While we have procedures in place to manage our credit risk, such as conducting due diligence on our customers and running stress test simulations to monitor and manage exposures, including any exposures resulting from loans collateralized with crypto assets, we remain subject to risks associated with our borrowers’ creditworthiness and our approval process.
Borrower loan loss rates may be significantly affected by economic downturns or general economic conditions beyond our control and beyond the control of individual borrowers. In particular, loss rates on loans may increase due to factors such as prevailing market conditions in our industry, the price of Bitcoin and other crypto assets, which have experienced significant fluctuations, the amount of liquidity in the markets, and other factors. Borrowers may seek protection under federal bankruptcy law or similar laws. If a borrower of a loan files for bankruptcy (or becomes the subject of an involuntary petition), a stay may go into effect that will automatically put any pending collection actions on the loan on hold and prevent further collection action absent bankruptcy court approval. The efficacy of our security interest in customer
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collateral is not guaranteed under applicable state law or the Uniform Commercial Code and therefore we may be exposed to loss in the event of a customer default, even if we appear to be secured against such default. While we have not incurred any material losses to date, if any of the foregoing events were to occur, our reputation and relationships with borrowers, and our financial results, could be harmed. We intend to continue to explore other products, models, and structures for offering commercial financing, and other forms of credit and loan products. Some of those models or structures may require, or be deemed to require, additional data, procedures, partnerships, licenses, regulatory approvals, or capabilities that we have not yet obtained or developed.
We are exposed to transaction losses due to chargebacks, refunds, or returns as a result of fraud or uncollectability that could adversely affect our business, operating results, and financial condition.
Certain of our products and services are paid for by electronic transfers from bank accounts, which exposes us to risks associated with returns and insufficient funds. Furthermore, some of our products and services are paid for by credit and debit cards through payment processors, which exposes us to risks associated with chargebacks and refunds. These risks could arise from fraud, misuse, unintentional use, settlement delay, insufficiency of funds, or other activities. Also, criminals are using increasingly sophisticated methods to engage in illegal activities, such as counterfeiting and fraud. If we are unable to collect such amounts from the customer, or if the customer refuses or is unable, due to bankruptcy or other reasons, to reimburse us, we bear the loss for the amount of the chargeback, refund, or return.
While we have policies and procedures to manage and mitigate these risks, we cannot be certain that such processes will be effective. Our failure to limit chargebacks and fraudulent transactions could increase the number of returns, refunds, and chargebacks that we have to process. In addition, if the number of returns, refunds, and chargebacks increases, card networks or our financial institution partners could require us to increase reserves, impose penalties on us, charge additional or higher fees, or terminate their relationships with us. Failure to effectively manage risk and prevent fraud could increase our chargeback, refund, and return losses or cause us to incur other liabilities. Increases in chargebacks, refunds, returns, or other liabilities could have an adverse effect on our operating results, financial condition, and cash flows.
We route orders through third-party trading venues in connection with our Coinbase Prime trading service. The loss or failure of any such trading venues could adversely affect our business, operating results, and financial condition.
In connection with our Prime trading service, we routinely route customer orders to third-party exchanges or other trading venues. In connection with these activities, we generally hold cash and other crypto assets with such third-party exchanges or other trading venues in order to effect customer orders. If we were to experience a disruption in our access to these third-party exchanges and trading venues, our Prime trading service could be adversely affected to the extent that we are limited in our ability to execute order flow for our Prime customers. In addition, while we have policies and procedures to help mitigate our risks related to routing orders through third-party trading venues, if any of these third-party trading venues experience any technical, legal, regulatory, or other adverse events, such as shutdowns, delays, system failures, suspension of withdrawals, illiquidity, insolvency, or loss of customer assets, we might not be able to fully recover the cash and other crypto assets that we have deposited with these third parties. As a result, our business, operating results, and financial condition could be adversely affected.
Any acquisitions and investments that we make could require significant management attention, disrupt our business, result in dilution to our shareholders, and could adversely affect our business, operating results, and financial condition.
As part of our business strategy, we routinely conduct discussions and evaluate opportunities for possible acquisitions, strategic investments, entries into new businesses, joint ventures, and other transactions. We have made, and may continue to make, acquisitions of and investments in, among other
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things, specialized employees and complementary companies, products, services, licenses, or technologies.
For example, as a result of our acquisition of Deribit in August 2025, we now provide additional cryptocurrency products and services internationally, including options and perpetual swaps. If we are unable to successfully integrate Deribit or comply with evolving U.S. and international crypto and derivatives regulations applicable to our expanded operations and products, we could be required to modify or discontinue certain offerings, face limitations on our ability to onboard or serve customers in key markets, incur substantial compliance and remediation costs, or be subject to penalties and other enforcement actions, any of which could adversely affect our business, operating results, and financial condition.
In the future, the pace and scale of our acquisitions may increase and may include larger acquisitions than we have done historically. We also invest in companies and technologies, many of which are private companies and technologies that are highly speculative in nature. In the future, we may not be able to find other suitable acquisition and investment candidates, and we may not be able to complete acquisitions or make investments on favorable terms, if at all. In some cases, the costs of such acquisitions and investments may be substantial, and there is no assurance that we will receive a favorable return on investment for our acquisitions and investments. We have and may in the future be required to write off acquisitions or investments. Moreover, our previous and future acquisitions and investments may not achieve our goals, and any future acquisitions and investments we complete could be viewed negatively by customers, developers, advertisers, or investors. In addition, if we fail to successfully close or integrate any acquisitions, or integrate the products or technologies associated with such acquisitions into our company, our business, operating results, and financial condition could be adversely affected. Our ability to acquire and integrate companies, products, services, licenses, employees, or technologies in a successful manner is unproven. Any integration process may require significant time and resources, and we may not be able to manage the process successfully, including successfully securing regulatory approvals which may be required to close the transaction and to continue to operate the target firm’s business or products in a manner that is useful to us. We may not successfully evaluate or utilize the acquired products, services, technology, or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, which could adversely affect our business, operating results, and financial condition. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our shareholders, which, depending on the size of the acquisition, may be significant. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.
If we fail to develop, maintain, and enhance our brand and reputation, our business, operating results, and financial condition could be adversely affected.
Our brand and reputation are key assets and a competitive advantage. Maintaining, protecting, and enhancing our brand depends largely on the success of our marketing efforts, ability to provide consistent, high-quality, and secure products, services, features, and support, and our ability to successfully secure, maintain, and defend our rights to use the “Coinbase” mark and other trademarks important to our brand. We believe that the importance of our brand will increase as competition further intensifies. Our brand and reputation could be harmed if we fail to achieve these objectives or if our public image were to be tarnished by negative publicity, unexpected events, or actions by third parties. Unfavorable publicity regarding, for example, our product changes, product quality, litigation or regulatory activity, privacy and data security practices, terms of service, employment matters, the use of our products, services, or supported crypto assets for illicit or objectionable ends, the actions of our customers, or the actions of other companies that provide similar services to ours, has in the past, and could in the future, adversely affect our reputation. Moreover, to the extent that we acquire a company and maintain that acquired company’s separate brand, we could experience brand dilution or fail to retain positive impressions of our own brand to the extent such impressions are instead attributed to the acquired company’s brand. In addition, because we are a founder-led company, actions by, or
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unfavorable publicity about, Brian Armstrong, our co-founder and Chief Executive Officer, may adversely impact our brand and reputation. Such negative publicity also could have an adverse effect on the size and engagement of our customers and could result in decreased revenue, which could adversely affect our business, operating results, and financial condition.
Key business metrics and other estimates are subject to inherent challenges in measurement and change as our business evolves, and our business, operating results, and financial condition could be adversely affected by real or perceived inaccuracies in those metrics or any changes in metrics we disclose.
We regularly review our key business metrics to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions. These key business metrics are calculated using internal company data and have not been validated by an independent third-party. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement at the time of reporting, there are inherent challenges in such measurements. If we fail to maintain an effective analytics platform, our key business metrics calculations may be inaccurate, and we may not be able to identify those inaccuracies. Additionally, we may in the future calculate certain key business metrics using third-party data. While we believe the third-party data we have used in the past or may use in the future is reliable, we have not independently verified and may not in the future independently verify the accuracy or completeness of the data contained in such sources and there can be no assurance that such data is free of error. Any inaccuracy in the third-party data we use could cause us to overstate or understate our key business metrics. We regularly review our processes for calculating these metrics, and from time to time we make adjustments to improve their accuracy. Additionally, our MTUs metric is measured at a point in time and as our products and internal processes for calculating these metrics evolve over time, a previously reported number could fluctuate. We generally will not update previously disclosed key business metrics for any such inaccuracies or adjustments that are immaterial.
Our key business metrics may also be impacted by compliance or fraud-related bans, technical incidents, or false or spam accounts in existence on our platform. We regularly deactivate fraudulent and spam accounts that violate our terms of service, and exclude these users from the calculation of our key business metrics; however, we may not succeed in identifying and removing all such accounts from our platform. Additionally, users are not prohibited from having more than one account and our MTUs metric may overstate the number of unique customers who have registered an account on our platform as one customer may register for, and use, multiple accounts with different email addresses, phone numbers, or usernames. Furthermore, MTUs may overstate the number of unique consumers due to differences in product architecture or user behavior, which may cause MTUs to fluctuate. For example, a user may currently have an account on the Base App (formerly Coinbase Wallet) that is unlinked to their registered account on our platform, but then choose to link these accounts in the future as our product offerings evolve. To the extent that the user had activity in both their Wallet and their registered account in the measurement period, what was previously captured as two unique MTUs would now be counted as a single MTU. If MTUs or our other key business metrics provide us with incorrect or incomplete information about users and their behavior, we may make inaccurate conclusions about our business.
We may change our key business metrics from time to time, which may be perceived negatively. Given the rapid evolution of the crypto markets and our revenue sources, we regularly evaluate whether our key business metrics remain meaningful indicators of the performance of our business. As a result of these evaluations, in the past we have decided to make changes, and in the future may make additional changes, to our key business metrics, including adding, eliminating, or replacing existing metrics. Further, if investors or the media perceive any changes to our key business metrics disclosures negatively, our business, operating results, and financial condition could be adversely affected.
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Our platform may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams. If our platform is used to further such illegal activities, our business, operating results, and financial condition could be adversely affected.
Our platform may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, sanctions evasion, and scams. We or our partners may be specifically targeted by individuals seeking to conduct fraudulent or otherwise illicit transfers, and it may be difficult or impossible for us to detect and avoid such transactions in certain circumstances. The use of our platform for illegal or improper purposes could subject us to claims, individual and class action lawsuits, and government and regulatory investigations, prosecutions, enforcement actions, inquiries, or requests that could result in liability and reputational harm for us. Moreover, certain activities that may be legal in one jurisdiction may be illegal in another jurisdiction, and certain activities that are at one time legal may in the future be deemed illegal in the same jurisdiction. As a result, there is significant uncertainty and cost associated with detecting and monitoring transactions for compliance with local laws. In the event that a customer is found responsible for intentionally or inadvertently violating the laws in any jurisdiction, we may be subject to governmental inquiries, enforcement actions, prosecuted, or otherwise held secondarily liable for aiding or facilitating such activities. Changes in law have also increased the penalties for money transmitters for certain illegal activities, and government authorities may consider increased or additional penalties from time to time. Owners of intellectual property rights or government authorities may seek to bring legal action against money transmitters, including us, for involvement in the sale of infringing or allegedly infringing items. Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss of transaction volume, or increased costs could harm our business.
Moreover, while fiat currencies can be used to facilitate illegal activities, crypto assets are relatively new and, in many jurisdictions, may be lightly regulated or largely unregulated. Many types of crypto assets have characteristics, such as the speed with which digital currency transactions can be conducted, the ability to conduct transactions without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, the irreversible nature of certain crypto asset transactions, and encryption technology that anonymizes these transactions, that make crypto assets susceptible to use in illegal activity. U.S. federal regulatory authorities and law enforcement agencies, such as the Department of Justice, the Department of the Treasury, SEC, CFTC, FTC, FinCEN or the Internal Revenue Service (“IRS”), various state securities and financial regulators, such as the NYDFS, and similar foreign regulatory authorities, have taken and continue to take legal actions against persons and entities alleged to be engaged in fraudulent schemes or other illicit activity involving crypto assets. We also support crypto assets that incorporate privacy-enhancing features, and may from time to time support additional crypto assets with similar functionalities. These privacy-enhancing crypto assets obscure the identities of sender and receiver, and may prevent law enforcement officials from tracing the source of funds on the blockchain. Facilitating transactions in these crypto assets may cause us to be at increased risk of liability arising out of anti-money laundering and economic sanctions laws and regulations.
While we believe that our risk management and compliance framework is designed to detect significant illicit activities conducted by our potential or existing customers, we cannot ensure that we will be able to detect all illegal activity on our platform. Base Chain (formerly Base), an open source permissionless L2 protocol built on the Ethereum blockchain developed by us, has been in the past, and may in the future, be a target for scam tokens or other illegal activity. For example, in August 2023, a number of fraudulent tokens were identified and traded on Base Chain blockchain. As we continue to develop Base Chain, and in light of this fraudulent activity, we continue to invest in improving our security processes, including through our in-house blockchain monitoring capabilities, third-party tools for identifying malicious and out of pattern events, and the monitoring of contract source code and bytecode on Base Chain against a database of known scam code patterns. While to date, such illegal or fraudulent activity on Base Chain has not had a material impact on our business, operating results, financial condition, or cash flows, future illegal activity could adversely affect our business, operating results, financial condition or cash flows and our efforts to identify and remedy such illegal or fraudulent activity
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may not be successful. If our platform is used to further such illegal activities, our business, operating results, and financial condition could be adversely affected.
Our compliance and risk management methods might not be effective and may result in outcomes that could adversely affect our reputation, operating results, and financial condition.
Our ability to comply with applicable complex and evolving laws, regulations, and rules is largely dependent on the establishment, maintenance, and scaling of our compliance, internal audit, and reporting systems to continuously keep pace with our customer activity and transaction volume, as well as our ability to attract and retain qualified compliance and other risk management personnel. While we have devoted significant resources to develop policies and procedures to identify, monitor, and manage our risks, and expect to continue to do so in the future, we cannot assure you that our policies and procedures are and will always be effective or that we have been and will always be successful in monitoring or evaluating the risks to which we are or may be exposed in all market environments or against all types of risks, including unidentified or unanticipated risks. Our risk management policies and procedures rely on a combination of technical and human controls and supervision that are subject to error and failure. Some of our methods for managing risk are discretionary by nature and are based on internally developed controls and observed historical market behavior, and also involve reliance on standard industry practices. These methods may not adequately prevent losses, particularly as they relate to extreme market movements, which may be significantly greater than historical fluctuations in the market. Further, market disruptions in the future may cause us to reevaluate our risk management policies and procedures. Accordingly, in the future, we may identify gaps in such policies and procedures or existing gaps may become higher risk, and may require significant resources and management attention. Our risk management policies and procedures also may not adequately prevent losses due to technical errors if our testing and quality control practices are not effective in preventing failures. In addition, we may elect to adjust our risk management policies and procedures to allow for an increase in risk tolerance, which could expose us to the risk of greater losses.
Regulators periodically review our compliance with our own policies and procedures and with a variety of laws and regulations. We have received in the past and may from time to time receive additional examination reports citing violations of rules and regulations and inadequacies in existing compliance programs, and requiring us to enhance certain practices with respect to our compliance program, including due diligence, training, monitoring, reporting, and recordkeeping. If we fail to comply with these, or do not adequately remediate certain findings, regulators could take a variety of actions that could impair our ability to conduct our business, including, but not limited to, delaying, denying, withdrawing, or conditioning approval of certain products and services. In addition, regulators have broad enforcement powers to censure, fine, issue cease and desist orders, prohibit us from engaging in some of our business activities, or revoke our licenses. We face significant intervention by regulatory authorities, including extensive examination and surveillance activities, and will continue to face the risk of significant intervention by regulatory authorities in the future. In the case of non-compliance or alleged non-compliance, we could be subject to investigations and proceedings that may result in substantial penalties or civil lawsuits, including by customers, for damages which can be significant. Any of these outcomes would adversely affect our reputation and brand and our business, operating results, and financial condition. Some of these outcomes could adversely affect our ability to conduct our business.
We hold certain investments in DeFi protocols and may suffer losses if they do not function as expected.
We hold investments in various DeFi protocols. These protocols achieve their investment purposes through self-executing smart contracts that allow users to invest crypto assets in a pool from which other users can borrow without requiring an intermediate party to facilitate these transactions. These investments earn interest to the investor based on the rates at which borrowers repay the loan, and can generally be withdrawn with no restrictions. However, these DeFi protocols are subject to various risks, including uncertain regulatory and compliance conditions in large markets such as the United States, the risk that the underlying smart contract is insecure, the risk that borrowers may default and the investor will
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not be able to recover its investment, the risk that any underlying collateral may experience significant volatility, and the risk of certain core developers with protocol administration rights can make unauthorized or harmful changes to the underlying smart contract. If any of these risks materialize, our investments in these DeFi protocols may be adversely impacted.
We may suffer losses due to abrupt and erratic market movements.
The crypto asset market has been characterized by significant volatility and unexpected price movements, and has experienced significant declines in the past. Certain crypto assets may become more volatile and less liquid in a very short period of time, resulting in market prices being subject to erratic and abrupt market movement, which could harm our business. For instance, abrupt changes in volatility or market movement can lead to extreme pressures on our platform and infrastructure that can lead to inadvertent suspension of services across parts of the platform or the entire platform. As a result, from time to time we experience outages. For example, in 2025, we experienced approximately 10 outages, with an average outage duration of 74.2 minutes. Outages can lead to increased customer service expense, can cause customer loss and reputational damage, result in inquiries and actions by regulators, and can lead to other damages for which we may be responsible.
Risks Related to Crypto Assets
Due to unfamiliarity and some negative publicity associated with crypto asset platforms, confidence or interest in crypto asset platforms may decline.
Crypto asset platforms are relatively new. Many of our competitors are unlicensed, unregulated, operate without supervision by any governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. As a result, customers and the general public may lose confidence or interest in crypto asset platforms, including regulated platforms like ours.
Since the inception of our industry, numerous crypto asset platforms have been sued, investigated, or shut down due to fraud, manipulative practices, business failure, and security breaches. In many of these instances, customers of these platforms were not compensated or made whole for their losses. Larger platforms like us are more appealing targets for hackers and malware, and may also be more likely to be targets of regulatory enforcement actions. For example, in February 2014, Mt. Gox, the then largest crypto asset platform worldwide, filed for bankruptcy protection in Japan after an estimated 700,000 Bitcoins were stolen from its wallets. In May 2019, Binance, one of the world’s largest platforms, was hacked, resulting in losses of approximately $40 million, and in February 2021, Bitfinex settled a long-running legal dispute with the State of New York related to Bitfinex’s alleged misuse of over $800 million of customer assets. The failure of several prominent crypto trading venues and lending platforms in 2022 resulted in a loss of confidence in the broader industry, adverse reputational impact to crypto asset platforms, increased negative publicity surrounding crypto more broadly, heightened scrutiny by regulators and lawmakers and a call for increased regulations of crypto assets and crypto asset platforms.
In addition, there have been reports that a significant amount of crypto asset trading volume on crypto asset platforms is fabricated and false in nature, with a specific focus on unregulated platforms located outside the United States. Such reports may indicate that the market for crypto asset platform activities is significantly smaller than otherwise understood.
Negative perception, a lack of stability and standardized regulation in our industry, and the closure or temporary shutdown of crypto asset platforms due to fraud, business failure, hackers or malware, or government mandated regulation, and associated losses suffered by customers may continue to reduce confidence or interest in our industry and result in greater volatility of the prices of assets, including significant depreciation in value. Any of these events could have an adverse impact on our business and our customers’ perception of us, including decreased use of our platform and loss of customer demand for our products and services.
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Depositing and withdrawing crypto assets into and from our platforms involve risks, which could result in loss of customer assets, customer disputes and other liabilities, which could adversely affect our business, operating results, and financial condition.
In order to own, transfer and use a crypto asset on its underlying blockchain network, a person must have a private and public key pair associated with a network address, commonly referred to as a “wallet.” Each wallet is associated with a unique “public key” and “private key” pair, each of which is a string of alphanumerical characters. To deposit crypto assets held by a customer onto our platforms, a customer must “sign” a transaction that consists of the private key of the wallet from where the customer is transferring crypto assets, the public key of a wallet that we control which we provide to the customer, and broadcast the deposit transaction onto the underlying blockchain network. Similarly, to withdraw crypto assets from our platforms, the customer must provide us with the public key of the wallet that the crypto assets are to be transferred to, and we would be required to “sign” a transaction authorizing the transfer. In addition, some crypto networks require additional information to be provided in connection with any transfer of crypto assets to or from our platforms. A number of errors can occur in the process of depositing or withdrawing crypto assets into or from our platforms, such as typos, mistakes, or the failure to include the information required by the blockchain network. For instance, a user may incorrectly enter our wallet’s public key or the desired recipient’s public key when depositing and withdrawing from our platforms, respectively. Alternatively, a user may transfer crypto assets to a wallet address that the user does not own, control or hold the private keys to. In addition, each wallet address is only compatible with the underlying blockchain network on which it is created. For instance, a Bitcoin wallet address can only be used to send and receive Bitcoins. If any Ethereum or other crypto assets are sent to a Bitcoin wallet address, or if any of the foregoing errors occur, all of the customer’s sent crypto assets will be permanently and irretrievably lost with no means of recovery. We have encountered and expect to continue to encounter similar incidents with our customers. Such incidents could result in customer disputes, damage to our brand and reputation, legal claims against us, and financial liabilities, any of which could adversely affect our business, operating results, and financial condition.
Moreover, we hold customer assets one-to-one at all times and we have procedures to process redemptions and withdrawals expeditiously, following the terms of the applicable user agreements. We have not experienced excessive redemptions or withdrawals, or prolonged suspended redemptions or withdrawals, of crypto assets to date. However, similar to traditional financial institutions, we may experience temporary process-related withdrawal delays. For example, we, and traditional financial institutions, may experience such delays if there is a significant volume of withdrawal requests that is vastly beyond anticipated levels. This does not mean we cannot or will not satisfy withdrawals, but this may mean a temporary delay in satisfying withdrawal requests, which we still expect to be satisfied within the withdrawal timelines set forth in the applicable user agreements or otherwise communicated by us. To the extent we have process-related delays, even if brief or due to blockchain network congestion or heightened redemption activity, and within the terms of an applicable user agreement or otherwise communicated by us, we may experience increased customer complaints and damage to our brand and reputation and face additional regulatory scrutiny, any of which could adversely affect our business, operating results, and financial condition.
A temporary or permanent blockchain “fork” to any supported crypto asset could adversely affect our business, operating results, and financial condition.
Blockchain protocols, including Bitcoin and Ethereum, are open source. Any user can download the software, modify it, and then propose that Bitcoin, Ethereum, or other blockchain protocols users and miners adopt the modification. When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin, Ethereum or other blockchain protocol networks, as applicable, remain uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork” (i.e., “split”) of the impacted blockchain protocol network and respective blockchain, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the
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existence of two parallel versions of the Bitcoin, Ethereum, or other blockchain protocol network, as applicable, running simultaneously, but with each split network’s crypto asset lacking interchangeability.
Both Bitcoin and Ethereum protocols have been subject to “forks” that resulted in the creation of new networks, including Bitcoin Cash ABC, Bitcoin Cash SV, Bitcoin Diamond, Bitcoin Gold, Ethereum Classic, EthereumPOW, and others. Some of these forks have caused fragmentation among platforms as to the correct naming convention for forked crypto assets. Due to the lack of a central registry or rulemaking body, no single entity has the ability to dictate the nomenclature of forked crypto assets, causing disagreements and a lack of uniformity among platforms on the nomenclature of forked crypto assets, and which results in further confusion to customers as to the nature of assets they hold on platforms. In addition, several of these forks were contentious and as a result, participants in certain communities may harbor ill will towards other communities. As a result, certain community members may take actions that adversely impact the use, adoption, and price of Bitcoin, Ethereum, or any of their forked alternatives.
Furthermore, hard forks can lead to new security concerns. For instance, when the Ethereum and Ethereum Classic networks split in July 2016, replay attacks, in which transactions from one network were rebroadcast on the other network to achieve “double-spending,” plagued platforms that traded Ethereum through at least October 2016, resulting in significant losses to some crypto asset platforms. Similar replay attacks occurred in connection with the Bitcoin Cash and Bitcoin Cash SV network split in November 2018. Another possible result of a hard fork is an inherent decrease in the level of security due to the splitting of some mining power across networks, making it easier for a malicious actor to exceed 50% of the mining power of that network, thereby making crypto assets that rely on proof-of-work more susceptible to attack, as has occurred with Ethereum Classic.
We do not believe that we are required to support any fork or airdrop or provide the benefit of any forked or airdropped crypto asset to our customers. However, we have in the past and may in the future continue to be subject to claims by customers arguing that they are entitled to receive certain forked or airdropped crypto assets by virtue of crypto assets that they hold with us. If any customers succeed on a claim that they are entitled to receive the benefits of a forked or airdropped crypto asset that we do not or are unable to support, we may be required to pay significant damages, fines or other fees to compensate customers for their losses.
Future forks may occur at any time. A fork can lead to a disruption of networks and our information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to temporary or even permanent loss of our and our customers’ assets. Such disruption and loss could cause us to be exposed to liability, even in circumstances where we have no intention of supporting an asset compromised by a fork.
We currently support, and expect to continue to support, certain smart contract-based crypto assets. If the underlying smart contracts for these crypto assets do not operate as expected, they could lose value and our business, operating results, and financial condition could be adversely affected.
We currently support, and expect to continue to support, various crypto assets that represent units of value on smart contracts deployed on a third-party blockchain. Smart contracts are programs that store and transfer value and execute automatically when certain conditions are met. Since smart contracts typically cannot be stopped or reversed, vulnerabilities in their programming and design can have damaging effects. For instance, in April 2018, a batch overflow bug was found in many Ethereum-based ERC20-compatible smart contract tokens that allowed hackers to create a large number of smart contract tokens, causing multiple crypto asset platforms worldwide to shut down ERC20-compatible token trading. Similarly, in March 2020, a design flaw in the MakerDAO smart contract caused forced liquidations of crypto assets at significantly discounted prices, resulting in millions of dollars of losses to users who had deposited crypto assets into the smart contract. If any such vulnerabilities or flaws come to fruition, smart contract-based crypto assets, including those held by our customers on our platforms, may suffer
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negative publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity over a short period of time.
In some cases, smart contracts can be controlled by one or more “admin keys” or users with special privileges, or “super users.” These users have the ability to unilaterally make changes to the smart contract, enable or disable features on the smart contract, change how the smart contract receives external inputs and data, and make other changes to the smart contract. For smart contracts that hold a pool of reserves, these users may also be able to extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the assets held by the smart contract in reserves. Even for crypto assets that have adopted a decentralized governance mechanism, such as smart contracts that are governed by the holders of a governance token, such governance tokens can be concentrated in the hands of a small group of core community members, who would be able to make similar changes unilaterally to the smart contract. If any such super user or group of core members unilaterally make adverse changes to a smart contract, the design, functionality, features and value of the smart contract, its related crypto assets may be harmed. In addition, assets held by the smart contract in reserves may be stolen, misused, burnt, locked up or otherwise become unusable and irrecoverable. These super users can also become targets of hackers and malicious attackers. If an attacker is able to access or obtain the super user privileges of a smart contract, or if a smart contract’s super users or core community members take actions that adversely affect the smart contract, our customers who hold and transact in the affected crypto assets may experience decreased functionality and value of the applicable crypto assets, up to and including a total loss of the value of such crypto assets. Although we do not control these smart contracts, any such events could cause customers to seek damages against us for their losses, result in reputational damage to us, or in other ways adversely affect our business, operating results, and financial condition.
From time to time, we may encounter technical issues in connection with the integration of supported crypto assets and changes and upgrades to their underlying networks, which could adversely affect our business, operating results, and financial condition.
In order to support any supported crypto asset, a variety of front and back-end technical and development work is required to implement our wallet, custody, trading, staking and other solutions for our customers, and to integrate such supported crypto asset with our existing technical infrastructure. For certain crypto assets, a significant amount of development work is required and there is no guarantee that we will be able to integrate successfully with any existing or future crypto asset, or that such integration will be secure against blockchain-level exploits or vulnerabilities. In addition, such integration may introduce software errors or weaknesses into our platform, including our existing infrastructure. Even if such integration is initially successful, any number of technical changes, software upgrades, soft or hard forks, cybersecurity incidents, or other changes to the underlying blockchain network may occur from time to time, causing incompatibility, technical issues, disruptions, or security weaknesses to our platform. If we are unable to identify, troubleshoot and resolve any such issues successfully, we may no longer be able to support such crypto asset, our customers’ assets may be frozen or lost, the security of our hot, warm, or cold wallets may be compromised, and our platform and technical infrastructure may be affected, all of which could adversely affect our business, operating results, and financial condition.
If miners or validators of any supported crypto asset demand high transaction fees, our business, operating results, and financial condition could be adversely affected.
We charge blockchain transaction fees when a customer sends certain crypto assets from their Coinbase account to a non-Coinbase account. We estimate the blockchain transaction fee based on the cost that we will incur to process the withdrawal transaction on the underlying blockchain network. In addition, we also pay blockchain transaction fees when we move crypto assets for various operational purposes, such as when we transfer crypto assets between our hot and cold wallets, for which we do not charge our customers. However, blockchain transaction fees have been and may continue to be unpredictable. If the block rewards for miners on any blockchain network are not sufficiently high to incentivize miners, miners may demand higher transaction fees, or collude to reject low transaction fees
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and force users to pay higher fees. Although we generally attempt to pass blockchain transaction fees relating to customer withdrawals through to our customers, we have in the past incurred, and expect to incur from time to time, losses associated with the payment of blockchain transaction fees in excess of what we charge our customers, which could adversely affect our business, operating results, and financial condition.
Future developments regarding the treatment of crypto assets for U.S. and foreign tax purposes could adversely affect our business, operating results, and financial condition.
Due to the nature of crypto assets and the absence of comprehensive legal and tax guidance with respect to crypto asset products and transactions, many significant aspects of the U.S. and foreign tax treatment of transactions involving crypto assets, such as the purchase and sale of crypto assets on our platform, as well as the provision of blockchain rewards and other crypto asset incentives and rewards products, are uncertain, and it is unclear whether, when and what guidance may be issued in the future on the treatment of crypto asset transactions for U.S. and foreign tax purposes.
In 2014, the IRS released Notice 2014-21, discussing certain aspects of “virtual currency” for U.S. federal income tax purposes and, in particular, stating that such virtual currency (i) is “property,” (ii) is not “currency” for purposes of the rules relating to foreign currency gain or loss, and (iii) may be held as a capital asset. From time to time, the IRS has released other guidance relating to the tax treatment of virtual currency or crypto assets reflecting the IRS’s position on certain issues. The IRS has not addressed many other significant aspects of the U.S. federal income tax treatment of crypto assets and related transactions.
There continues to be uncertainty with respect to the timing, character, and amount of income inclusions for various crypto asset transactions including, but not limited to lending and borrowing crypto assets, staking, and other crypto asset incentives and products that we offer. Although we believe our treatment of crypto asset transactions for federal income tax purposes is consistent with existing positions from the IRS and/or existing U.S. federal income tax principles, because of the advances in crypto asset innovations and the increasing variety and complexity of crypto asset transactions and products, it is possible the IRS and various U.S. states may disagree with our treatment of certain crypto asset offerings for U.S. tax purposes, which could adversely affect our customers and the vitality of our business. Similar uncertainties exist in the foreign markets in which we operate with respect to direct and indirect taxes, and these uncertainties and potential adverse interpretations of tax law could impact the amount of tax we and our non-U.S. customers are required to pay, and the vitality of our platforms outside of the United States.
There can be no assurance that the IRS, U.S. state revenue agencies, or other foreign tax authorities, will not alter their respective positions with respect to crypto assets in the future or that a court would uphold the treatment set forth in existing positions. It also is unclear what additional tax authority positions, regulations, or legislation may be issued in the future on the treatment of existing crypto asset transactions and future crypto asset innovations under U.S. federal, U.S. state, or foreign tax law. Any such developments could result in adverse tax consequences for holders of crypto assets and could have an adverse effect on the value of crypto assets and the broader crypto assets markets. Future technological and operational developments that may arise with respect to crypto assets may increase the uncertainty with respect to the treatment of crypto assets for U.S. and foreign tax purposes. The uncertainty regarding tax treatment of crypto asset transactions impacts our customers, and could impact our business, both domestically and abroad.
Our tax information reporting obligations with respect to crypto transactions may be subject to further scrutiny in light of the implementation of the U.S. and global broker reporting regime for tax reporting.
In 2021, the U.S. Congress passed the Infrastructure Investment and Jobs Act (the “IIJA”), providing that brokers would be responsible for reporting to the IRS the transactions of their customers in digital assets, including transfers to other exchanges or to digital asset wallets not connected to any exchange.
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In 2024, the U.S. Treasury Department and the IRS released final regulations and issued other administrative guidance on tax information reporting for digital assets (collectively, the “Final Regulations”) that are applicable, in certain cases as of January 1, 2025.
Although we believe we are compliant with U.S. tax reporting and withholding requirements, our compliance with the Final Regulations, including but not limited to U.S. onboarding requirements through Forms W-9 and W-8, backup withholding, non-resident alien withholding, and Form 1099 and Form 1042-S reporting obligations, may be subject to scrutiny and may be challenged. There is a risk that we may not properly implement processes and procedures necessary to comply with the Final Regulations, may misinterpret the IIJA, the Final Regulations, or the administrative guidance, or may experience disruptions in the systems recently built. If the IRS determines that we are not in compliance with our tax reporting or withholding obligations, significant taxes and penalties may be imposed, which could adversely affect our financial position. The Final Regulations require us to invest substantially in new compliance processes and procedures, which also could adversely affect our financial position. Further, the IRS may issue additional guidance with respect to tax reporting and withholding obligations, which could impose additional burdens on us and result in significant taxes and penalties that could adversely affect our financial position.
Similarly, new rules for reporting crypto assets under the global “common reporting standard” (CRS) and the “crypto-asset reporting framework” (CARF) have been implemented on our operations, creating new obligations and a need to continue investing in new onboarding and reporting infrastructure. Such rules have been adopted by numerous member and observer states of the “Organization for Economic Cooperation and Development” and by the European Commission on behalf of the member states of the European Union. These new rules may give rise to potential liabilities or disclosure requirements for prior customer arrangements and operational challenges that affect how we onboard our customers and report their transactions to taxing authorities. Additionally, the European Union has implemented a directive, commonly referred to as “CESOP” (the Central Electronic System of Payment information), which requires payment service providers in the European Union to report cross-border fiat transactions to taxing authorities on a quarterly basis. Any actual or perceived failure by us to comply with the above or any other tax and financial regulations that apply to our operations could harm our business, lead to customer attrition, and adversely affect our financial position.
The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies on certain topics. If financial accounting standards undergo significant changes, our operating results could fluctuate.
The accounting rules and regulations that we must comply with are complex and subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and various other bodies formed to promulgate and interpret appropriate accounting principles. Recent actions and public comments from the FASB and the SEC have focused on the integrity of financial reporting and internal controls and many companies’ accounting policies are being subjected to heightened scrutiny by regulators and the public. Further, there remains relatively limited precedent for the financial accounting of crypto assets and related valuation and revenue recognition, even while the crypto ecosystem continues to evolve rapidly, leading in some cases to related accounting standards becoming quickly outdated. Moreover, a change in these principles or interpretations could have a significant effect on our reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. For example, on March 31, 2022, the staff of the SEC issued Staff Accounting Bulletin (“SAB”) No. 121 (“SAB 121”), which represented a significant change regarding how a company safeguarding crypto assets held for its platform users reports such crypto assets on its balance sheet and required retrospective application as of January 1, 2022. In January 2025, the staff of the SEC issued SAB No. 122 (“SAB 122”), which rescinds the previously-issued interpretive guidance included within SAB 121. We adopted SAB 122 as of December 31, 2024 on a retrospective basis.
Uncertainties in or changes to regulatory or financial accounting standards could result in the need to change our accounting methods and may retroactively affect previously reported results and impair our
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ability to provide timely and accurate financial information, which could adversely affect our financial statements, result in a loss of investor confidence, and our business, operating results, and financial condition.
Risks Related to Government Regulation and Privacy Matters
The onchain economy is novel. As a result, policymakers are considering what a regulatory regime for crypto would look like and the elements that would serve as the foundation for such a regime. This less developed consideration of crypto may harm our ability to effectively react to proposed legislation and regulation of crypto assets or crypto asset platforms adverse to our business.
As crypto assets have grown in both popularity and market size, various U.S. federal, state, and local and foreign governmental organizations, consumer agencies and public advocacy groups have been examining the operations of crypto networks, users and platforms, with a focus on how crypto assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist enterprises, and simultaneously how to ensure the safety and soundness of platforms and other service providers that hold crypto assets for users. Many of these entities have called for heightened regulatory oversight, and have issued consumer advisories describing the risks posed by crypto assets to users and investors.
Competitors, including traditional financial services, have spent years cultivating professional relationships with relevant policymakers on behalf of their industry so that those policymakers may understand that industry, the current legal landscape affecting that industry, and the specific policy proposals that could be implemented in order to responsibly develop that industry. The lobbyists working for these competitors have similarly spent years developing and working to implement strategies to advance these industries. Members of the onchain economy have started to engage policymakers directly and with the help of external advisors and lobbyists. For example, in order to advance our mission, in February 2022 we launched our Coinbase Innovation Political Action Committee to support crypto-forward political candidates and initiatives. Further, in December 2023, we together with a number of other crypto and blockchain market participants supported the launch of the Fairshake Political Action Committee, which supports political candidates who support crypto and blockchain innovation or against political candidates who do not support crypto and blockchain innovation. However, these efforts to educate policymakers and advocate for sensible crypto regulation are nascent compared to more established industries, and may be perceived unfavorably by investors and the public and have an adverse impact on our brand and reputation. As a result, new laws and regulations may be proposed and adopted in the United States and internationally, or existing laws and regulations may be interpreted in new ways, that harm the onchain economy or crypto asset platforms, which could adversely affect our business, operating results, and financial condition.
Our Consolidated Balance Sheets may not contain sufficient amounts or types of regulatory capital to meet the changing requirements of our various regulators worldwide, which could adversely affect our business, operating results, and financial condition.
We are required to possess sufficient financial soundness and strength to adequately support our regulated subsidiaries. We may from time to time incur indebtedness and other obligations which could make it more difficult to meet these capitalization requirements or any additional regulatory requirements. In addition, although we are not a bank holding company for purposes of United States law or the law of any other jurisdiction, as a global provider of financial services and in light of the changing regulatory environment in various jurisdictions, we could become subject to new capital requirements introduced or imposed by the United States and international regulators. Any change or increase in these regulatory requirements could adversely affect our business, operating results, and financial condition.
As a financial institution licensed to, among other things, engage in money transmission in the United States, to conduct virtual currency business activity in New York, Dubai and Bermuda, and issue electronic money in the United Kingdom and the European Union, we are subject to strict rules governing
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how we manage and hold customer fiat currency, stablecoins, and crypto assets. We maintain complex treasury operations to manage and move customer fiat currency, stablecoins, and crypto assets across our platforms and to comply with regulatory requirements. However, it is possible we may experience errors in fiat currency, stablecoin, and crypto asset handling, accounting, and regulatory reporting that lead us to be out of compliance with these requirements. In addition, regulators may increase the amount of capital reserves that we are required to maintain for our operations, as has happened in the past, which may lead to sanctions, penalties, changes to our business operations, or the revocation of licenses. Frequent launch of new products and services, margin trading, lending functions, and the addition of new payment rails increase these risks.
Many of the crypto assets and other products, such as event contracts, in which we facilitate trading are subject to regulatory authority by the CFTC. Any fraudulent or manipulative activity in a crypto asset or other regulated product, including event contracts, occurring on our platform could subject us to increased regulatory scrutiny, regulatory enforcement, and litigation.
The CFTC has stated and judicial decisions involving CFTC enforcement actions have confirmed that at least some crypto assets, including Bitcoin, ether, litecoin, and stablecoins, such as USDC, USDT and BUSD, fall within the definition of a “commodity” under the U.S. Commodities Exchange Act of 1936 (the “CEA”). As a result, the CFTC has general enforcement authority to police against manipulation and fraud in at least some spot crypto asset markets. From time to time, manipulation, fraud, and other forms of improper trading by market participants have resulted in, and may in the future result in, CFTC investigations, inquiries, enforcement action, and similar actions by other regulators, government agencies, and civil litigation. Such investigations, inquiries, enforcement actions, and litigation may cause us to incur substantial costs and could result in negative publicity.
Furthermore, the CTFC has regulatory authority over certain product offerings, including event contracts, which are regulated as “swaps” under the CEA. This classification subjects us to the CFTC’s supervisory and enforcement oversight, including supervisory requirements to prevent manipulation, fraud and other forms of improper trading in these markets. As a result, the offering and facilitation of these contracts on our platform could result in increased regulatory scrutiny, investigations, and enforcement actions, which may cause us to incur substantial costs and expose us to civil liability, fines, and reputational harm. Some states have taken the position that the states and not the CFTC should be the appropriate regulator for sports-related event contracts and that question is the subject of ongoing litigation. See the Risk Factor titled “We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.” for additional information.
Certain transactions in crypto assets may constitute “retail commodity transactions” subject to regulation by the CFTC as futures contracts. If crypto asset transactions we facilitate are deemed to be such retail commodity transactions, we would be subject to additional regulatory requirements, licenses and approvals, and potentially face regulatory enforcement, civil liability, and significant increased compliance and operational costs.
Any transaction in a commodity, including a crypto asset, entered into with or offered to retail investors using leverage, margin, or other financing arrangements (a “retail commodity transaction”) is subject to CFTC regulation as a futures contract unless such transaction results in actual delivery within 28 days. The meaning of “actual delivery” has been the subject of commentary and debate. To the extent that crypto asset transactions that we facilitate or facilitated are deemed retail commodity transactions, including pursuant to current or subsequent rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight, and we could be subject to judicial or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations. The CFTC has previously brought enforcement actions against entities engaged in retail commodity transactions without appropriate registrations, as well as recent enforcement settled orders against developers of decentralized platforms.
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Particular crypto assets or transactions therein, or other contracts or products we offer, could be deemed “commodity interests” (e.g., futures, options, swaps) or security-based swaps subject to regulation by the CFTC or SEC, respectively. If a crypto asset that we facilitate trading in is deemed a commodity interest or a security-based swap, we would be subject to additional regulatory requirements, registrations and approvals, and potentially face regulatory enforcement, civil liability, and significant increased compliance and operational costs.
Commodity interests, as such term is defined by the CEA and CFTC rules and regulations, are subject to more extensive supervisory oversight by the CFTC, including registrations of entities engaged in, and platforms offering, commodity interest transactions. This CFTC authority extends to crypto asset futures contracts and swaps, including transactions that are based on current and future prices of crypto assets and indices of crypto assets. To the extent that a crypto asset in which we facilitate or facilitated trading or transactions in a crypto asset which we facilitate or facilitated are deemed to fall within the definition of a commodity interest, including pursuant to subsequent rulemaking or guidance by the CFTC, we may be subject to additional regulatory requirements and oversight and could be subject to judicial or administrative sanctions if we do not or did not at a relevant time possess appropriate registrations as an exchange (for example, as a designated contract market for trading futures or options on futures, or as a swaps execution facility for trading swaps) or as a registered intermediary (for example, as a futures commission merchant or introducing broker). Such actions could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm. The CFTC has previously brought enforcement actions against entities engaged in crypto asset activities for failure to obtain appropriate exchange, execution facility and intermediary registrations.
Furthermore, the CFTC and the SEC have jointly adopted regulations defining “security-based swaps,” which include swaps based on single securities and narrow-based indices of securities. If a crypto asset is deemed to be a security, certain transactions referencing that crypto asset could constitute a security-based swap. A crypto asset or transaction therein that is based on or references a security or index of securities, whether or not such securities are themselves crypto assets, could also constitute a security-based swap. To the extent that a crypto asset in which we facilitate or have facilitated trading or transactions in a crypto asset which we facilitate or have facilitated are deemed to fall within the definition of a security-based swap, including pursuant to subsequent rulemaking or guidance by the CFTC or SEC, we may be subject to additional regulatory requirements and oversight by the SEC and could be subject to judicial or administrative sanctions if we do not or did not a relevant time possess appropriate registrations as an exchange (for example, as a security-based swaps execution facility) or as a registered intermediary (for example, as a security-based swap dealer or broker-dealer). This could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, as well as reputational harm.
We collect and process a large amount of sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as adversely affect our business, operating results, and financial condition.
We collect and process large amounts of sensitive data, including personal data related to our customers and their transactions, such as their names, addresses, social security numbers, visa information, copies of government-issued identification, biometric facial recognition data (from scanning of photographs for identity verification and fraud prevention purposes), trading data, tax identification, and bank account information. We face risks, including to our reputation, in the processing and protection of this data, and these risks will increase as our business continues to expand, including through our acquisition of, and investment in, other companies and technologies. Federal, state, and international laws and regulations governing privacy, data protection, and e-commerce transactions require us to safeguard our customers’, employees’, and service providers’ personal data.
We have administrative, technical, and physical security measures and controls in place and maintain a robust information security program. However, our security measures, those of our vendors or service providers, or the security measures of companies we acquire, may be inadequate or breached as a result
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of third-party action, employee or service provider error, malfeasance, malware, phishing, hacking attacks, system error, trickery, advances in computer capabilities, new discoveries in the field of cryptography, inadequate facility security or otherwise, and, as a result, someone may be able to obtain unauthorized access to sensitive information, including personal data, on our systems. We could be the target of a cybersecurity incident, which could result in harm to our reputation and financial losses. Additionally, our customers have been and could be targeted in cybersecurity incidents like an account takeover, which could result in harm to our reputation and financial losses. For example, as previously disclosed on a Current Report on Form 8-K filed with the SEC on May 15, 2025, a threat actor improperly obtained information about certain customer accounts and internal documentation, and used that information for social-engineering attempts. No passwords or private keys were compromised as a result of this incident. We continue to face risks related to this incident, including harm to our reputation, governmental investigations and regulatory scrutiny, and ongoing litigation.
Our future success depends on the reliability and security of our platform. To the extent that the measures we, any companies we acquire, or our third-party service providers, vendors, or business partners have taken prove to be insufficient or inadequate, or to the extent we discover a security breach suffered by a company we acquire following the closing of such acquisition, we may become subject to litigation, breach notification obligations, or regulatory or administrative sanctions, which could result in significant fines, penalties, damages, harm to our reputation, or loss of customers. If our own confidential business information or sensitive customer information were improperly disclosed, our business, operating results, and financial condition could be adversely affected. Additionally, a party who circumvents our security measures could, among other effects, appropriate customer information or other proprietary data, cause interruptions in our operations, or expose customers to hacks, viruses, and other disruptions.
The increasing sophistication of AI poses a greater risk of identity fraud, as malicious actors may exploit various AI technologies to create increasingly convincing false identities, transaction records, or attempt to manipulate our verification processes. This necessitates ongoing enhancements to our verification systems and security protocols to prevent unauthorized access and protect sensitive information. Failure to manage these risks or to implement effective countermeasures could lead to unauthorized transactions, financial losses, reputational damage and increased regulatory scrutiny.
Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may also have obligations to notify customers and regulators about the incident, and we may need to provide some form of remedy, such as a subscription to credit monitoring services, pay significant fines to one or more regulators, or pay compensation in connection with a class-action settlement. Breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. In the United States, the SEC has adopted rules for mandatory disclosure of material cybersecurity incidents suffered by public companies, as well as cybersecurity governance and risk management. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises customer data. Any failure or perceived failure by us to comply with these laws may also subject us to enforcement action or litigation, any of which could harm our business. Additionally, the financial exposure from the events referenced above could either not be insured against or not be fully covered through any insurance that we may maintain, and there can be no assurance that the limitations of liability in any of our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. Any of the foregoing could adversely affect our business, reputation, operating results, and financial condition.
Furthermore, we may be required to disclose personal data pursuant to demands from individuals, regulators, government agencies, and law enforcement agencies in various jurisdictions with conflicting privacy and security laws, which could result in a breach of privacy and data protection policies, notices, laws, rules, court orders, and regulations. Additionally, changes in the laws and regulations that govern our collection, use, and disclosure of customer data could impose additional requirements with respect to
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the retention and security of customer data, could limit our marketing activities, and adversely affect our business, operating results, and financial condition.
We are subject to laws, regulations, and industry requirements related to data privacy, data protection and information security, and user protection across different markets where we conduct our business, including in the United States, European Economic Area (the “EEA”), and Asia-Pacific region, and such laws, regulations, and industry requirements are constantly evolving and changing. Any actual or perceived failure to comply with such laws, regulations, and industry requirements, or our privacy policies, could harm our business.
Various local, state, federal, and international laws, directives, and regulations apply to our collection, use, retention, protection, disclosure, transfer, and processing of personal data. These data protection and privacy laws and regulations are subject to uncertainty and continue to evolve in ways that could adversely affect our business, operating results, and financial condition. These laws have a substantial impact on our operations both outside and in the United States, either directly or as a data processor and handler for various offshore entities.
In the United States, state and federal lawmakers and regulatory authorities have increased their attention on the collection and use of user data and various laws and regulations apply to the collection, processing, disclosure, and security of certain types of data, including the Gramm Leach Bliley Act (“GLBA”) and state laws relating to privacy and data security. GLBA requires financial institutions to explain their information sharing practices to their customers and to safeguard sensitive data. Additionally, the Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, and security of data. For example, California has enacted the California Consumer Privacy Act (the “CCPA”).
The CCPA requires covered companies to, among other things, provide disclosures to individuals in California, and affords such individuals privacy rights such as the ability to opt-out of certain sales of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used, and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase security breach litigation.
In addition, other U.S. states have proposed or enacted laws that contain obligations similar to the CCPA that have taken effect or will take effect in coming years. We cannot fully predict the impact of recently proposed or enacted laws or regulations on our business or operations, but compliance may require us to modify our data processing practices and policies incurring costs and expense. Further, to the extent multiple state-level laws are introduced with inconsistent or conflicting standards, it may require costly and difficult efforts to achieve compliance with such laws. Our failure or perceived failure to comply with state privacy laws or regulations passed in the future could adversely affect our business, including how we use personal information, operating results, and financial condition.
Additionally, many foreign countries and governmental bodies, including Australia, Brazil, Kenya, the European Union, India, Japan, Philippines, Indonesia, Singapore, United Kingdom, Switzerland, and numerous other jurisdictions in which we may operate or conduct our business, have laws and regulations concerning the collection, use, processing, storage, and deletion of personal data obtained from their residents or by businesses operating within their jurisdiction. These laws and regulations often are more restrictive than those in the United States. Such laws and regulations may require companies to implement new privacy and security policies, permit individuals to access, correct, and delete personal data stored or maintained by such companies, inform individuals of security breaches that affect their personal data, require that certain types of data be retained on local servers within these jurisdictions, and, in some cases, obtain individuals’ affirmative opt-in consent to collect and use personal data for certain purposes.
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We are subject to, or may become subject to, the E.U.’s and the U.K.’s General Data Protection Regulation (collectively, the “GDPR”), the E.U. ePrivacy Directive (including its national implementations), the E.U. Data Act, the E.U. Digital Operational Resilience Act and other E.U. and U.K. laws that regulate personal data, non-personal data, and cybersecurity operations. The most well-known of such laws, the GDPR, imposes stringent privacy and personal data protection requirements and could increase the risk of non-compliance and the costs of providing our products and services in a compliant manner. A breach of the GDPR could result in regulatory investigations, reputational damage, fines and sanctions, orders to cease or change our processing of our data, enforcement notices, or assessment notices (for a compulsory audit). For example, if regulators assert that we have failed to comply with the GDPR, we may be subject to fines of up to €20 million in the E.U. (£17.5 million in the U.K.) or 4% of our worldwide annual revenue, whichever is greater. We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.
The GDPR and Swiss data protection laws impose strict rules on the transfer of personal data out of the E.U., U.K., or Switzerland to a “third country,” including the United States, unless particular compliance mechanisms are implemented. The mechanisms that we and many other companies rely upon for such data transfers (for example, standard contractual clauses or the E.U.-U.S. and Swiss-U.S. Data Privacy Framework (“DPF”) and the U.K. extension to the DPF) are the subject of legal challenge, regulatory interpretation, and judicial decisions. In the E.U. and other markets, potential new rules and restrictions on the flow of data across borders could increase the cost and complexity of doing business in those regions.
While we maintain E.U.-U.S., Swiss-U.S. and U.K.-U.S. DPF certification, we still rely on the standard contractual clauses for intercompany data transfers from the European Union, Switzerland, and the U.K. to the United States. As supervisory authorities continue to issue further guidance on personal data, we could suffer additional costs, complaints, or regulatory investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations and could adversely affect our financial results.
We are also subject to evolving privacy laws on cookies and e-marketing and online behavioral advertising. As regulators become increasingly focused on compliance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, negatively impact our efforts to understand users, adversely affect our margins, increase costs, and subject us to additional liabilities.
There is a risk that as we expand, we may assume liabilities for breaches experienced by the companies we acquire. Additionally, there are potentially inconsistent world-wide government regulations pertaining to data protection and privacy. Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection, and information security, it is possible that our practices, offerings, or platform could fail, or be alleged to fail to meet applicable requirements. For instance, the overall regulatory framework governing the application of privacy laws to blockchain technology is still highly undeveloped and likely to evolve. Further there are also changes in the regulatory landscape relating to new and evolving technologies. Our failure, or the failure by our third-party providers or partners, to comply with applicable laws or regulations and to prevent unauthorized access to, or use or release of personal data, or the perception that any of the foregoing types of failure has occurred, even if unfounded, could subject us to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, severe criminal, or civil sanctions, damage our reputation, or result in fines or proceedings by governmental agencies and private claims and litigation, any of which could adversely affect our business, operating results, and financial condition.
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Issues relating to the development and use of AI in our business could result in reputational harm, competitive harm, and legal liability, and could adversely affect our business, operating results, and financial condition.
We currently leverage internally developed and third-party developed AI into certain aspects of our business and we anticipate that AI will become increasingly important to our operations in the future. Our competitors and other third parties may incorporate AI into their businesses or offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our business, operating results, and financial condition.
Our use of AI may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory regulation and scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our reputation, business, operating results, and financial condition. Evolving legal frameworks and guidance, such as the E.U. AI Act, other international regimes, and emerging developments with respect to U.S. federal and state regulations, rules, and industry standards governing AI may require us and our third-party developers to incur significant costs to modify, maintain, or align our business practices, services, and solutions to comply with rules and regulations, the nature of which cannot be determined at this time and may be inconsistent from jurisdiction to jurisdiction.
There can be no assurance that the use of AI and machine learning solutions and features will enhance our products or services, produce the intended results, or be beneficial to our business, including our efficiency. Consumer and societal attitudes toward AI are evolving and there is a risk that customers, regulators or the public may perceive AI technologies negatively. Concerns about automation, automated decision making, privacy, security, transparency, or other ethical considerations could reduce trust in our products and services or deter customer adoption of AI-enabled features in our products or services. AI machine learning systems are complex and may be flawed, insufficient, reflect unwanted forms of bias, or contain errors or inadequacies that are not easily detectable, or may cause unintentional or unexpected outputs that are incorrect, including with respect to financial data, do not match our business goals, do not comply with our policies or those of our regulators, or are otherwise are inconsistent with our brand. If the output that the AI applications we use to produce such output is, or is alleged to be, inaccurate, deficient, or biased, our reputation, business, operating results, and financial condition could be adversely affected.
Risks Related to Third Parties
Our current and future services are dependent on payment networks and acquiring processors, and any changes to their rules or practices could adversely affect our business, operating results, and financial condition.
We rely on financial institutions and other payment processors to process customers’ payments in connection with the purchase of crypto assets on our platform and we pay these providers fees for their services. From time to time, payment networks have increased, and may increase in the future, the interchange fees and assessments that they charge for transactions that use their networks. Payment networks have imposed, and may impose in the future, special fees on the purchase of crypto assets, including on our platform, which could negatively impact us and significantly increase our costs. Our payment card processors may have the right to pass any increases in interchange fees and assessments on to us, and may impose additional use charges which would increase our operating costs and reduce our operating income. We could attempt to pass these increases along to our customers, but this strategy might result in the loss of customers to our competitors that may not pass along the increases, thereby reducing our revenue and earnings. If competitive practices prevent us from passing along the higher fees to our customers in the future, we may have to absorb all or a portion of such increases, thereby increasing our operating costs and reducing our earnings.
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We may also be directly or indirectly liable to the payment networks for rule violations. Payment networks set and interpret their network operating rules and have alleged from time to time that various aspects of our business model violate these operating rules. If such allegations are not resolved favorably, they may result in significant fines and penalties, require changes in our business practices, or result in the loss of their services for parts of our business, any of which may be costly and adversely affect our business. The payment networks could adopt new operating rules or interpret or reinterpret existing rules that we or our processors might find difficult or even impossible to follow, or costly to implement. As a result, we could lose our ability to give customers the option of using cards to fund their purchases or the choice of currency in which they would like their card to be charged. If we are unable to accept cards or are limited in our ability to do so, our business, operating results, and financial condition could be adversely affected.
We depend on major mobile operating systems and third-party platforms for the distribution of certain products. If Google Play, the Apple App Store, or other platforms prevent customers from downloading our apps, our ability to grow may be hindered and our business, operating results, and financial condition could be adversely affected.
We rely upon third-party platforms for the distribution of certain products and services. Our Coinbase and the Base App (formerly Coinbase Wallet) apps are provided as free applications through both the Apple App Store and the Google Play Store, and are also accessible via mobile and traditional websites. The Google Play Store and Apple App Store are global application distribution platforms and the main distribution channels for our apps. As such, the promotion, distribution, and operation of our apps are subject to the respective platforms’ terms and policies for application developers, which are very broad and subject to frequent changes and re-interpretation. Further, these distribution platforms often contain restrictions related to crypto assets that are uncertain, broadly construed, and can limit the nature and scope of services that can be offered. For example, Apple App Store’s restrictions related to crypto assets have disrupted the proposed launch of many features within the Coinbase and the Base App apps, including NFT transfer services and access to decentralized applications. If our products are found to be in violation of any such terms and conditions, we may no longer be able to offer our products through such third-party platforms. There can be no guarantee that third-party platforms will continue to support our product offerings, or that customers will be able to continue to use our products. For example, in December 2019, we were instructed by Apple to remove certain features relating to decentralized applications from our application to comply with the Apple App Store’s policies. Any changes, bugs, technical or regulatory issues with third-party platforms, our relationships with mobile manufacturers and carriers, or changes to their terms of service or policies could degrade our products’ functionalities, reduce or eliminate our ability to distribute our products, give preferential treatment to competitive products, limit our ability to deliver high quality offerings, or impose fees or other charges, any of which could affect our product usage and adversely affect our business, operating results, and financial condition.
Risks Related to Intellectual Property
Our intellectual property rights are valuable, and any inability to protect them could adversely affect our business, operating results, and financial condition.
Our business depends in large part on our proprietary technology and our brand. We rely on, and expect to continue to rely on, a combination of trademark, trade dress, patents, domain name, copyright, and trade secrets, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights. However, our efforts to protect our intellectual property rights may not be sufficient or effective. Our proprietary technology and trade secrets could be lost through misappropriation or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. There can be no assurance that our intellectual property rights will be sufficient to protect against others
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offering products, services, or technologies that are substantially similar to ours and that compete with our business.
We do not intend to monetize our patents or attempt to block third parties from competing with us by asserting our patents offensively, but our ability to successfully defend intellectual property challenges from competitors and other parties may depend, in part and where permissible, on our ability to counter-assert our patents defensively. Effective protection of our intellectual property may be expensive and difficult to maintain, both in terms of application and registration costs as well as the costs of defending and enforcing those rights. As we have grown, we have sought to obtain and protect our intellectual property rights in an increasing number of countries, a process that can be expensive and may not always be successful. In some instances, patent applications or patents may be abandoned or allowed to lapse, resulting in partial or complete loss of patent rights in a relevant jurisdiction. Further, intellectual property protection may not be available to us in every country in which our products and services are available, and the regulatory landscape in such jurisdictions may evolve rapidly, leading to an unanticipated change in the ability to obtain and enforce intellectual property rights in these jurisdictions. For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against certain third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. We may also agree to license our patents to third parties as part of various patent pools and open patent projects. Those licenses may diminish our ability, though, to counter-assert our patents against certain parties that may bring claims against us.
We have been, and in the future may be, sued by third parties for alleged infringement of their proprietary rights.
In recent years, there has been considerable patent, copyright, trademark, domain name, trade secret, and other intellectual property development activity in the onchain economy, as well as litigation, based on allegations of infringement or other violations of intellectual property, including by large financial institutions. The evolving climate and new policy initiatives at the U.S. Patent and Trademark Office (“USPTO”) related to the Patent Trial and Appeal Board are creating a more challenging environment to invalidate patents that are or can be asserted against us. Furthermore, individuals and groups can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. Finally, the USPTO has recently implemented and may continue to implement changes that expand the subject matter considered eligible for patent protection, which may make it easier for competitors and other adverse parties to obtain patents related to our platform and technology.
Our use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation. We cannot guarantee that our internally developed or acquired technologies and content do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or services or using certain technologies, force us to implement expensive or less effective work-arounds, or impose other unfavorable terms. We expect that the occurrence of infringement claims is likely to grow as the crypto assets market grows and matures. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources. Further, during the course of any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities analysts and investors regard these announcements as negative, the market price of our Class A common stock may decline. Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures. Any of the foregoing could prevent us from competing effectively and could adversely affect our business, operating results, and financial condition.
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Our platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could harm our business.
Our platform contains software modules licensed to us by third-party authors under “open source” licenses. We also make certain of our own software available to users for free under various open source licenses. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. In addition, the public availability of such software may make it easier for others to compromise our platform.
Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our software.
We have not recently conducted an extensive audit of our use of open source software and, as a result, we cannot assure you that our processes for controlling our use of open source software in our platform are, or will be, effective. If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face litigation, infringement claims, or other liabilities. Likewise, we may be required to seek costly licenses from third parties to continue providing our offerings on terms that are not economically feasible, to re-engineer our platform, to discontinue or delay the provision of our offerings if re-engineering cannot be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, operating results, and financial condition. Moreover, the terms of many open source licenses have not been interpreted by U.S. or foreign courts. As a result, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our platform. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software.
Risks Related to Our Employees and Other Service Providers
The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could adversely affect our business, operating results, and financial condition.
We operate in a relatively new industry that is not widely understood and requires highly skilled and technical personnel. We believe that our future success is highly dependent on the talents and contributions of our senior management team, including Mr. Armstrong, our co-founder and Chief Executive Officer, members of our executive team, and other key employees across product, engineering, risk management, finance, compliance and legal, and marketing. Our future success depends on our ability to attract, develop, motivate, and retain highly qualified and skilled employees. The pool of qualified talent in our industry is extremely limited, particularly with respect to executive talent, engineering, risk management, and financial regulatory expertise. We face intense competition for qualified individuals from numerous software and other technology companies. To attract and retain key personnel, we incur significant costs, including salaries and benefits and equity incentives. Even so, these measures may not be enough to attract and retain the personnel we require to operate our business effectively. The loss of even a few key employees or senior leaders, or an inability to attract, retain and motivate additional highly skilled employees required for the planned expansion of our business could adversely affect our business, operating results, and financial condition and impair our ability to grow.
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Our culture emphasizes innovation, and if we cannot maintain this culture, our business, operating results, and financial condition could be adversely affected.
We believe that our entrepreneurial and innovative corporate culture has been a key contributor to our success. We encourage and empower our employees to develop and launch new and innovative products and services, which we believe is essential to attracting high quality talent, partners, and developers, as well as serving the best, long-term interests of our company. If we cannot maintain this culture, we could lose the innovation, creativity and teamwork that has been integral to our business. Additionally, from time to time, we realign our resources and talent to implement stage-appropriate business strategies, including furloughs, layoffs, or reductions in force. In such cases, we may find it difficult to prevent a negative effect on employee morale or attrition beyond our planned reduction, in which case our products and services may suffer and our business, operating results, and financial condition could be adversely affected.
In the event of employee or service provider misconduct or error, our business, operating results, and financial condition could be adversely affected.
We have and may in the future experience employee or service provider misconduct. Employee or service provider misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of customer funds, insider trading and misappropriation of information, failing to supervise other employees or service providers, improperly using confidential information, as well as improper trading activity such as spoofing, layering, wash trading, manipulation and front-running. Employee or service provider errors, including mistakes in executing, recording, or processing transactions for customers, could expose us to the risk of material losses even if the errors are detected. Although we have implemented processes and procedures and provide trainings to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful. Moreover, the risk of employee or service provider error or misconduct may be even greater for novel products and services and is compounded by the fact that many of our employees and service providers are accustomed to working at tech companies which generally do not maintain the same compliance customs and rules as financial services firms. This can lead to high risk of confusion among employees and service providers with respect to compliance obligations, particularly including confidentiality, data access, trading, and conflicts. It is not always possible to deter misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. If we were found to have not met our regulatory oversight and compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand and reputation.
Our officers, directors, employees, and large shareholders may encounter potential conflicts of interests with respect to their positions or interests in certain crypto assets, entities, and other initiatives, which could adversely affect our business and reputation.
We frequently engage in a wide variety of transactions and maintain relationships with a significant number of crypto projects, their developers, members of their ecosystem, and investors. These transactions and relationships could create potential conflicts of interests in management decisions that we make. For instance, certain of our officers, directors, and employees are active investors in crypto projects themselves, and may make investment decisions that favor projects that they have personally invested in. Many of our large shareholders also make investments in these crypto projects. In addition, our co-founder and Chief Executive Officer, Mr. Armstrong, is involved in a number of initiatives related to the onchain economy and more broadly. For example, Mr. Armstrong currently serves as the chief executive officer of ResearchHub Technologies, Inc., a scientific research development platform. This and
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other initiatives he is involved in could divert Mr. Armstrong’s time and attention from overseeing our business operations which could have a negative impact on our business. Moreover, we may in the future be subject to litigation as a result of his involvement with these other initiatives.
Similarly, certain of our directors, officers, employees, and large shareholders may hold crypto assets that we are considering supporting for trading on our platform, and may be more supportive of such listing notwithstanding legal, regulatory, and other issues associated with such crypto assets. While we have instituted policies and procedures to limit and mitigate such risks, there is no assurance that such policies and procedures will be effective, or that we will be able to manage such conflicts of interests adequately. If we fail to manage these conflicts of interests, or we receive unfavorable media coverage with respect to actual or perceived conflicts of interest, our business could be harmed and the brand, reputation and credibility of our company could be adversely affected.
General Risk Factors
Adverse economic conditions could adversely affect our business.
Our performance is subject to general economic conditions, and their impact on the crypto asset markets and our customers. The United States and other key international economies have experienced cyclical downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. Adverse general economic conditions have impacted in the past, and may impact in the future, the onchain economy, although the extent of such impacts remains uncertain and dependent on a variety of factors, including market adoption of crypto assets, global trends in the onchain economy, central bank monetary policies, instability in the global banking system, volatility and disruptions in the capital and credit markets, and other events beyond our control. Geopolitical developments, such as trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility of global financial and crypto asset markets. For example, in the past the capital and credit markets have experienced extreme volatility and disruptions, resulting in steep declines in the value of crypto assets. To the extent general economic conditions and crypto assets markets materially deteriorate or decline for a prolonged period, our ability to generate revenue and to attract and retain customers could suffer and our business, operating results and financial condition could be adversely affected. Moreover, even if general economic conditions were to improve following any such deterioration, there is no guarantee that the onchain economy would similarly improve.
Further, in 2022, a number of blockchain protocols and crypto financial firms, and in particular protocols and firms involving high levels of financial leverage such as high-yield lending products or derivatives trading, suffered from insolvency and liquidity crises leading to the failure of several prominent crypto trading venues and lending platforms. Some of which are alleged or have been held to be the result of fraudulent activity by insiders, including misappropriation of customer funds and other illicit activity and internal controls failures. In connection with these failures, concerns were raised about the potential for a market condition where the failure of one company leads to the financial distress of other companies, which has the potential to depress the prices of assets used as collateral by other firms. If such a market condition were to become widespread in the onchain economy, we could suffer from increased counterparty risk, including defaults or bankruptcies of major customers or counterparties, which could lead to significantly reduced activity on our platform and fewer available crypto market opportunities in general. Further, forced selling of crypto assets by distressed companies could lead to lower crypto asset prices and may lead to a reduction in our revenue. To the extent that conditions in the general economic and crypto asset markets were to materially deteriorate, our ability to attract and retain customers may suffer.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry, or the financial services industry generally, or concerns or rumors about any such events or other
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similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, in March 2023, Silvergate Capital Corp. announced it would wind down operations and liquidate Silvergate Bank. Soon after, the FDIC was appointed receiver of Silicon Valley Bank and Signature Bank. In connection with these issues and issues with other financial institutions, the prices of fiat-backed stablecoins, including USDC, were temporarily impacted and may be similarly impacted again in the future. Further, if the instability in the global banking system continues or worsens, there could be additional negative ramifications, such as additional all market-wide liquidity problems or impacted access to deposits and investments for customers of affected financial institutions and certain partners, and our business, operating results and financial condition could be adversely affected.
We are a remote-first company which subjects us to heightened operational risks.
Our employees and service providers work from home and we are a remote-first company. This subjects us to heightened operational risks. For example, technologies in our employees’ and service providers’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees and service providers to be more limited or less reliable than in our offices. Further, the security systems in place at our employees’ and service providers’ homes may be less secure than those used in our offices, and while we have implemented technical and administrative safeguards to help protect our systems as our employees and service providers work from home, we may be subject to increased cybersecurity risk, which could expose us to risks of data or financial loss, and could disrupt our business operations. There is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter risks associated with employees and service providers accessing company data and systems remotely. We also face challenges due to the need to operate with the remote workforce and are addressing those challenges to minimize the impact on our ability to operate.
Environmental, social, and governance factors may impose additional costs and expose us to new risks.
There is focus from certain investors, regulators, employees, users and other stakeholders concerning corporate responsibility, specifically related to environmental, social, and governance matters (“ESG”) and related assurances and disclosures. Compliance with recently adopted and future ESG requirements, including the E.U.’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive and California’s climate-related bills, may require the dedication of significant time and resources. If we are unable to comply with new laws and regulations or changes to existing legal or regulatory requirements concerning ESG matters, or if we fail to meet investor, industry, or stakeholder expectations and standards relating to ESG matters, our reputation may be harmed, customers may choose to refrain from using our products and services, we may be subject to fines, penalties, regulatory or other enforcement actions, and our business, operating results, and financial condition could be adversely affected.
Changes in U.S. and foreign tax laws, as well as the application of such laws, could adversely affect our business, operating results, and financial condition.
We are subject to complex tax laws and regulations in the United States and a variety of foreign jurisdictions. All of these jurisdictions have in the past and may in the future make changes to their corporate income tax rates and other income tax laws which could increase our future income tax provision. For example, our future income tax obligations could be adversely affected by earnings that are lower than anticipated in jurisdictions where we have lower statutory rates and by earnings that are higher than anticipated in jurisdictions where we have higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, by changes in the amount of unrecognized tax benefits, or by changes in tax laws, regulations, accounting principles, or interpretations thereof, including changes with possible retroactive application or effect.
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Our determination of our tax liability is subject to review and may be challenged by applicable U.S. and foreign tax authorities. Any adverse outcome of such a challenge could harm our operating results and financial condition. The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is complex and uncertain. Moreover, as a multinational business, we have subsidiaries that engage in many intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is complex and uncertain. Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current tax laws. Furthermore, as we operate in multiple taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes conflicting interpretations by taxing authorities of these jurisdictions. It is not uncommon for taxing authorities in different countries to have conflicting views with respect to, among other things, the characterization and source of income or other tax items, the manner in which the arm’s-length standard is applied for transfer pricing purposes, or with respect to the valuation of intellectual property. The taxing authorities of the jurisdictions in which we operate may challenge our tax treatment of certain items or the methodologies we use for valuing developed technology or intercompany arrangements, which could impact our worldwide effective tax rate and harm our financial position and operating results.
Further, any changes in the tax laws governing our activities may increase our tax expense, the amount of taxes we pay, or both. For example, the Tax Cuts and Jobs Act (the “TCJA”), enacted in 2017, significantly reformed the U.S. federal tax code, reducing the U.S. federal corporate income tax rate, making sweeping changes to the rules governing international business operations, and imposing new limitations on a number of tax benefits, including deductions for business interest and the use of net operating loss carryforwards. The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) further amended the U.S. federal tax code, imposing a 15% minimum tax on “adjusted financial statement income” of certain corporations as well as an excise tax on the repurchase or redemption of stock by certain corporations, beginning in the 2023 tax year. In addition, over the last several years, the Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Shifting (“BEPS”) Project that, if implemented, would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business. As of December 2025, over 150 countries have approved a framework that imposes a minimum tax rate of 15%, among other provisions. The G7 countries, including the United States, agreed to modify the provisions of the BEPS Project which may limit its impact on us in future years. There can be no assurance that future tax law changes will not increase the rate of the corporate income tax, impose new limitations on deductions, credits or other tax benefits, or make other changes that could impact our cash flows and adversely affect our business, operating results, and financial condition.
In addition, the IRS has yet to issue guidance on a number of important issues regarding the tax treatment of cryptocurrency and the products we provide to our customers and from which we derive our income. In the absence of such guidance, we will take positions with respect to any such unsettled issues. There is no assurance that the IRS or a court will agree with the positions taken by us, in which case tax penalties and interest may be imposed that could adversely affect our business, cash flows or financial performance.
We also are subject to non-income taxes, such as payroll, sales, use, value-added, digital services, net worth, property, and goods and services taxes in the United States and various foreign jurisdictions. Specifically, we may be subject to new allocations of tax as a result of increasing efforts by certain jurisdictions to tax activities that may not have been subject to tax under existing tax principles. Companies such as ours may be adversely impacted by such taxes. Taxing authorities may disagree with certain positions we have taken. As a result, we may have exposure to additional tax liabilities that could adversely affect our business, operating results, and financial condition.
As a result of these and other factors, the ultimate amount of tax obligations owed may differ from the amounts recorded in our financial statements and any such difference may harm our operating results in
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future periods in which we change our estimates of our tax obligations or in which the ultimate tax outcome is determined.
Our ability to use our deferred tax assets may be subject to certain limitations under U.S. or foreign law.
Realization of our deferred tax assets, in the form of future domestic or foreign tax deductions, credits or other tax benefits, will depend on future taxable income, and there is a risk that some or all of such tax assets could be subject to limitation or otherwise unavailable to offset future income tax liabilities, all of which could adversely affect our operating results. For example, future changes in our stock ownership, the causes of which may be outside of our control, could result in an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended, which could limit our use of such tax assets in certain circumstances. Similarly, additional changes may be made to U.S. (federal and state) and foreign tax laws which could further limit our ability to fully utilize these tax assets against future taxable income.
Under the Inflation Reduction Act, our ability to utilize tax deductions or losses from prior years may be limited by the imposition of the 15% minimum tax if such minimum tax applies to us. Therefore, we may be required to pay additional U.S. federal income taxes despite any available tax deductions, U.S. federal net operating loss carryforwards, credits, or other tax benefits that we accumulate.
We are exposed to fluctuations in foreign currency exchange rates.
Our exposure to fluctuations in foreign currency exchange rates through our international operations could have a negative impact on our operating results and financial condition. From time to time, we may engage in currency hedging activities to limit our exposure to foreign currency exchange rate fluctuations that arise in the normal course of business. The use of hedging instruments may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates, and may introduce additional risks if we are unable to structure effective hedges with such instruments.
If our estimates or judgment relating to our critical accounting estimates prove to be incorrect, our operating results could be adversely affected.
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in Part II, Item 8 of this Annual Report on Form 10-K. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of expenses that are not readily apparent from other sources. Significant estimates and judgments that comprise our critical accounting estimates involve the valuation of assets acquired and liabilities assumed in business combinations at and subsequent to acquisition, valuation of strategic investments, evaluation of tax positions, and evaluation of legal and other contingencies. Our business, operating results, and financial condition could be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to differ from the expectations of analysts and investors, resulting in a decline in the trading price of our Class A common stock.
We may be adversely affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as terrorism, that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
Natural disasters or other catastrophic events may also cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect on our business, operating results, and financial condition. Our business operations are subject to interruption by
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natural disasters, fire, power shortages, and other events beyond our control. In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause our operating results to suffer. For example, the COVID-19 pandemic and the related precautionary measures that we adopted have in the past resulted, and could in the future result, in difficulties or changes to our customer support, or create operational or other challenges, any of which could adversely affect our business, operating results, and financial condition. Further, acts of terrorism, labor activism or unrest, and other geopolitical unrest, including ongoing regional conflicts around the world, could cause disruptions in our business or the businesses of our partners or the economy as a whole. In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our platform, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results. We do not maintain insurance sufficient to compensate us for the potentially significant losses that could result from disruptions to our services. Additionally, all the aforementioned risks may be further increased if we do not implement a disaster recovery plan or our partners’ disaster recovery plans prove to be inadequate. To the extent natural disasters or other catastrophic events concurrently impact data centers we rely on in connection with private key restoration, customers will experience significant delays in withdrawing funds, or in the extreme we may suffer loss of customer funds.
If we fail to maintain an effective system of disclosure controls and procedures and internal control over our financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company we incur significant legal, accounting, and other expenses. The Sarbanes-Oxley Act of 2002 and related rules of the SEC require, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. If we encounter material weaknesses or deficiencies in our internal control over financial reporting, we may not detect errors on a timely basis and our Consolidated Financial Statements may be materially misstated.
Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that are required to be included in our periodic reports filed with the SEC. Ineffective disclosure controls and procedures or internal control over financial reporting may adversely affect investor confidence in us and, as a result, negatively impact the price of our Class A common stock and have a material and adverse effect on our business, operating results, and financial condition.
We may require additional capital to support business growth, and this capital might not be available.
We have funded our operations since inception primarily through equity financings, debt, and cash flows generated from operations. We cannot be certain that our operations will continue to fund our ongoing operations or the growth of our business. We intend to continue to make investments in our business, which investments may require us to secure additional funds. Additional financing may not be available on terms favorable to us, if at all, including due to general macroeconomic conditions, crypto market conditions and any disruptions in the crypto market, instability in the global banking system, increasing regulatory uncertainty and scrutiny or other unforeseen factors. In the event of a downgrade of our credit rating, our ability to raise additional financing may be adversely affected and any future debt offerings or credit arrangements we propose to enter into may be on less favorable terms or terms that may not be acceptable to us. In addition, even if debt financing is available, the cost of additional financing may be significantly higher than our current debt. If we incur additional debt, the debt holders
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would have rights senior to holders of our common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. Furthermore, we have authorized the issuance of “blank check” preferred stock and common stock that our board of directors could use to, among other things, issue shares of our capital stock in the form of blockchain tokens, implement a shareholder rights plan, or issue other shares of preferred stock or common stock. We may issue shares of capital stock, including in the form of blockchain tokens, to our customers in connection with customer reward or loyalty programs. If we issue additional equity securities, shareholders will experience dilution, and the new equity securities could have rights senior to those of our currently authorized and issued common stock. The trading prices for our common stock may be highly volatile, which may reduce our ability to access capital on favorable terms or at all. In addition, a slowdown or other sustained adverse downturn in the general economic or crypto asset markets could adversely affect our business and the value of our Class A common stock. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of securities. As a result, our shareholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests.
Risks Related to Ownership of Our Class A Common Stock
The market price of our Class A common stock may be volatile, and could decline significantly and rapidly. Market volatility may affect the value of an investment in our Class A common stock and could subject us to litigation.
Prior to the listing of our Class A common stock on Nasdaq, there was no public market for shares of our Class A common stock. Technology stocks have historically experienced high levels of volatility. The market price of our Class A common stock also could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K and others beyond our control, including:
•the number of shares of our Class A common stock publicly owned and available for trading;
•overall performance of the equity markets or publicly-listed financial services and technology companies;
•our actual or anticipated operating performance and the operating performance of our competitors;
•changes in the projected operational and financial results we provide to the public or our failure to meet those projections;
•failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;
•any major change in our board of directors, management, or key personnel;
•if we issue additional shares of capital stock, including in the form of blockchain tokens, in connection with customer reward or loyalty programs;
•issuance of shares of our Class A common stock, whether in connection with an acquisition or upon conversion of some or all of our outstanding 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, and 2032 Convertible Notes;
•repurchases under the Repurchase Program (as defined below) on unfavorable terms or at all;
•the highly volatile nature of the onchain economy and the prices of crypto assets;
•rumors and market speculation involving the onchain economy and the regulation thereof, or us or other companies in our industry;
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•announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; and
•other events or factors, including those resulting from political instability and acts of war or terrorism, regional conflicts around the world, government shutdowns, bank failures, or responses to these events.
Furthermore, the stock market has recently experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies and financial services and technology companies in particular. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general macroeconomic, political and market conditions such as recessions, interest rate changes, extended U.S. federal government shutdowns, or international currency fluctuations, may negatively impact the market price of our Class A common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We are currently subject to shareholder litigation, as described in the section titled “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K, and may continue to be the target of these types of actions or additional regulatory uncertainty and scrutiny in the future. Securities or regulatory actions against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
The dual class structure of our common stock has the effect of concentrating voting control with those shareholders, including our directors, executive officers, and 5% shareholders, and their respective affiliates. As a result of this structure, our Chief Executive Officer and trusts established by our Chief Executive Officer collectively have control over key decision making as a result of controlling a majority of our voting stock. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring shareholder approval.
Our Class B common stock has twenty votes per share, and our Class A common stock has one vote per share. Mr. Armstrong and the independent trustee of trusts established by Mr. Armstrong, collectively, are currently able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and, along with our directors, other executive officers, and 5% shareholders, and their affiliates, these shareholders hold in the aggregate a substantial majority of the voting power of our capital stock. Because of the twenty-to-one voting ratio between our Class B common stock and our Class A common stock, the holders of our Class B common stock, including Mr. Armstrong, collectively are expected to continue to control a significant percentage of the combined voting power of our common stock and therefore be able to control all matters submitted to our shareholders for approval until the earliest to occur of (i) the date fixed by the board of directors that is no less than 61 days and no more than 180 days after the date that the aggregate number of shares of Class B common stock held by Brian Armstrong and his affiliates is less than 25% of the aggregate number of shares of Class B common stock held by Mr. Armstrong and his affiliates on April 1, 2021, the date of effectiveness of the registration statement on Form S-1 for the listing of our Class A common stock on Nasdaq; (ii) the date and time specified by affirmative vote of the holders of at least 66-2/3% of the outstanding shares of Class B common stock, voting as a single class, and the affirmative vote of at least 66-2/3% of the then serving members of our board of directors, which must include the affirmative vote of Mr. Armstrong, if either (A) Mr. Armstrong is serving on our board of directors and has not been terminated for cause or resigned except for good reason (as each term is defined in our certificate of formation) from his position as our Chief Executive Officer or (B) Mr. Armstrong has not been removed for cause or resigned from the position of Chairman of the board of directors; and (iii) the death or disability (as defined in our certificate of formation) of Mr. Armstrong, when all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock. Holders of our Class A common stock are not entitled to vote separately as a single class except under certain limited circumstances. This concentrated control
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may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring shareholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of our shareholders. In addition, Mr. Armstrong has significant influence over (i) the management and major strategic investments of our company as a result of his position as our Chief Executive Officer and (ii) the election or replacement of our directors as a result of his voting rights. As a board member and officer, Mr. Armstrong owes a fiduciary duty to our shareholders and must act in good faith in a manner he reasonably believes to be in the best interests of our shareholders. As a shareholder, even a controlling shareholder, Mr. Armstrong is entitled to vote his shares, and shares over which he has voting control, in his own interests, which may not always be in the interests of our shareholders generally.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning purposes. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock, including Mr. Armstrong, who retain their shares in the long term. Moreover, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.
The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
Certain stock index providers exclude companies with multiple classes of shares of common stock from being added to certain stock indices. In addition, several shareholder advisory firms and large institutional investors oppose the use of multiple class structures. As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices, may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure, and may result in large institutional investors not purchasing shares of our Class A common stock. Any exclusion from stock indices could result in less demand for our Class A common stock. Any actions or publications by shareholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.
Sales or distribution of substantial amounts of our Class A common stock, or the perception that such sales or distributions might occur, could cause the market price of our Class A common stock to decline.
The sale or distribution of a substantial number of shares of our Class A common stock, particularly sales by us or our directors, executive officers, and principal shareholders, or the perception that these sales or distributions might occur in large quantities, could cause the market price of our Class A common stock to decline.
In addition, we have filed a registration statement to register shares reserved for future issuance under our equity compensation plans. All of the shares of Class A common stock and Class B common stock issuable upon the exercise of stock options or vesting and settlement of restricted stock units and performance restricted stock units will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements and compliance by affiliates with Rule 144 under the Securities Act.
Further, certain holders of shares of our common stock will have rights, subject to some conditions, to require us to file registration statements for the public resale of shares of Class A common stock or to include such shares in registration statements that we may file for us or other shareholders. Any
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registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the market price of our Class A common stock to decline or be volatile.
We also may issue our capital stock or securities convertible into our capital stock, including in the form of blockchain tokens, from time to time in connection with a financing, an acquisition, investments, pursuant to customer rewards, loyalty programs, and other incentive plans, or otherwise. Any such issuance could result in substantial dilution to our existing shareholders and cause the market price of our Class A common stock to decline.
If securities or industry analysts do not publish or cease publishing research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common stock and its liquidity could decline.
The trading market for our Class A common stock may be influenced by the research and reports that securities or industry analysts publish about us or our business, our market, and our competitors. We do not have any control over these analysts. If securities and industry analysts cease coverage of us altogether, the market price for our Class A common stock may be negatively affected. If one or more of the analysts who cover us downgrade our Class A common stock, or publish inaccurate or unfavorable research about our business, the price of our Class A common stock may decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Class A common stock could decrease, which might cause our Class A common stock price and trading volume to decline. In light of the unpredictability inherent in our business, our financial outlook commentary may differ from analysts’ expectations, which could cause volatility to the price of our Class A common stock.
We cannot guarantee that the Repurchase Program will be fully consummated or that such program will enhance the long-term value of our Class A common stock price.
In October 2024, our board of directors authorized and approved a share repurchase program, which provided for the repurchase of up to $1.0 billion of our outstanding Class A common stock without expiration. In October 2025, our board of directors (i) increased the aggregate repurchase authorization under the program from $1.0 billion to $2.0 billion and (ii) expanded the scope of the repurchases to include a portion of the aggregate principal amount of our outstanding 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and both series of Senior Notes (collectively, the “Notes”). In January 2026, our board of directors approved a $2.0 billion increase in the authorization of our previously announced repurchase program from $2.0 billion to $4.0 billion (as modified, the “Repurchase Program”). Repurchases may be made from time to time in the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), in privately negotiated transactions, in a tender offer, or by other methods in accordance with the applicable federal and state laws and regulations. The timing of any repurchases will depend on market conditions and other considerations, and will be made at our discretion. The Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our Class A common stock or Notes and may be modified, suspended, or discontinued at any time.
The Repurchase Program could affect the price of our Class A common stock and increase the volatility thereof. Price volatility may cause the average price at which we repurchase our Class A common stock or Notes in a given period to exceed the stock’s price at a given point in time. There can be no assurance that the Repurchase Program will have a positive impact on our Class A common stock price or net income (loss) per share. Important factors that could cause us to discontinue or decrease repurchases under the Repurchase Program include, among others: unfavorable market conditions; the market price of our Class A common stock; the nature of other investment or strategic opportunities presented to us from time to time; our ability to make appropriate, timely, and beneficial decisions as to when, how, and whether to effect repurchases; and the availability of funds necessary to fulfill such repurchases.
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Provisions in our charter documents and under Texas law, and certain rules imposed by regulatory authorities, could make an acquisition of us, which may be beneficial to our shareholders, more difficult, limit attempts by our shareholders to replace or remove our current management, limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees, and limit the price of our Class A common stock.
Provisions in our certificate of formation and bylaws may have the effect of delaying or preventing a merger, acquisition, or other change of control of our company that the shareholders may consider favorable. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors. Our certificate of formation and bylaws include provisions that:
•permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships;
•require super-majority voting to amend some provisions in our certificate of formation and bylaws;
•authorize the issuance of “blank check” preferred stock and common stock that our board of directors could use to implement a shareholder rights plan or issue other shares of preferred stock or common stock, including blockchain tokens;
•provide that only our Chief Executive Officer, the chairperson of our board of directors, a majority of our board of directors, or the holders of not less than 50% of the voting power of our shareholders will be authorized to call a special meeting of shareholders;
•provide that, in certain circumstances, any shareholder action by written consent must be unanimous;
•prohibit cumulative voting;
•provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring shareholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A common stock and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;
•provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and
•provide for advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at annual shareholder meetings.
Moreover, Subchapter M of Chapter 21 of the Texas Business Organizations Code (the “TBOC”) may discourage, delay, or prevent a change of control of our company, and imposes certain restrictions on mergers, business combinations, and other transactions between holders of 20% or more of our common stock and us.
In addition, a third party attempting to acquire us or a substantial position in our common stock may be delayed or ultimately prevented from doing so by change in ownership or control regulations to which our regulated broker-dealer subsidiaries are subject. FINRA Rule 1017 generally provides that FINRA approval must be obtained in connection with any transaction resulting in a single person or entity owning, directly or indirectly, 25% or more of a member firm’s equity and would include a change of control of a parent company.
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Our bylaws and certificate of formation contain an exclusive forum provision and jury trial waiver for certain claims, respectively, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our bylaws, to the fullest extent permitted by law, provides that the Business Court in the First Business Court Division of the State of Texas is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim that is based upon a breach of fiduciary duty owed by, or other wrongdoing by, any current or former director, officer, shareholder, employee or agent of ours, arising pursuant to the TBOC, our certificate of formation, or our bylaws; any action asserting a claim against us that is governed by the internal affairs doctrine; or any action asserting an “internal corporate claim” as defined in Section 2.115 of the TBOC. In addition, our certificate of formation provides that we, and our shareholders, directors, and officers, waive their rights to trial by jury in any legal proceeding arising out of or relating to any “internal entity claim.”
Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our bylaws provide that the federal district courts of the United States of America are, to the fullest extent permitted by law, the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or a Federal Forum Provision, unless we consent in writing to the selection of an alternative forum. While there can be no assurance that federal or state courts will follow determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision means that suits brought by our shareholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. The Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act to the fullest extent permitted by law. Accordingly, actions by our shareholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our shareholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities will be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. These provisions may limit our shareholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition.
Our bylaws contain an ownership threshold that must be met for a shareholder or shareholders to bring derivative claims against our officers or directors, which could limit a shareholder’s ability to bring such claims. In addition, Texas law does not recognize demand futility and as such may require additional procedural steps for a shareholder to bring a derivative claim.
Our bylaws provide that no shareholder or group of shareholders may in institute or maintain a derivative proceeding brought on our behalf against any of our directors or officers, unless the shareholder or group of shareholders, at the time the derivative proceeding is instituted, beneficially owns a number of shares of common stock sufficient to meet an ownership threshold of at least 3% of our total outstanding shares. In addition, Texas law generally does not recognize demand futility, which means that a shareholder bringing such a claim must provide our board of directors an opportunity to determine whether the claim is in our best interests before the shareholder may proceed with a lawsuit. Our board of directors will generally have 90 days in which to make this determination.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
Our cybersecurity risk management program includes:
•physical, technological, and administrative controls intended to support our cybersecurity and data governance framework, including protections designed to protect the confidentiality, integrity, and availability of our key information systems and customer, employee, partner, and other third-party information stored on those systems, such as access controls, encryption, data handling requirements, and other cybersecurity safeguards, and internal policies that govern our cybersecurity risk management and data protection practices;
•a defined procedure for timely incident detection, containment, response, and remediation, including a written security incident response plan that includes procedures for responding to cybersecurity incidents;
•cybersecurity risk assessment processes designed to help identify material cybersecurity risks to our critical systems, information, products, services, and broader enterprise IT environment;
•a security team responsible for managing our cybersecurity risk assessment processes and security controls;
•the use of external consultants or other third-party experts and service providers, where considered appropriate, to assess, test, or otherwise assist with aspects of our cybersecurity controls;
•annual cybersecurity and privacy training of employees, including incident response personnel and senior management, and specialized training for certain teams depending on their role and/or access to certain types of information, such as consumer information; and
•a third-party risk management process that includes internal vetting of certain third-party vendors and service providers with whom we may share data.
As previously disclosed on a Current Report on Form 8-K filed with the SEC on May 15, 2025, a threat actor improperly obtained information about certain customer accounts and internal documentation, and used that information for social-engineering attempts (the “Data Theft Incident”). No passwords or private keys were compromised as a result of this incident. During the year ended December 31, 2025, we paid $311.2 million of cash related to the Data Theft Incident, comprising voluntary customer reimbursements and direct legal costs. We continue to face risks related to the Data Theft Incident, including harm to our reputation, and costs related to governmental investigations and regulatory scrutiny, and ongoing litigation.
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on our operations, business strategy, operating results, or financial condition. For more information regarding cybersecurity risks that we face, including previous cybersecurity incidents, and potential impacts on our business related thereto, see the section titled “Risk Factors” in Part I Item 1A of this Annual Report on Form 10-K.
Cybersecurity Governance
The Audit Committee has established the Enterprise Risk Management Working Group (“ERMWG”), comprising members of our senior management team and other senior leaders, including our Chief Security Officer (“CSO”), to provide executive oversight of our enterprise risk management program. The ERMWG receives updates on cybersecurity matters from various staff members, including our Chief Information Security Officer (“CISO”) .
The Audit Committee receives updates from members of management, including our CSO and CISO, on our cybersecurity risks at its quarterly meetings, and reviews metrics about cyber threat response preparedness, program maturity milestones, risk mitigation status, and the current and emerging threat landscape. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity threats or incidents, as well as any incidents with lesser impact potential.
The Audit Committee reports to our board of directors regarding its activities, including those related to key cybersecurity risks, mitigation strategies, and ongoing developments, on a quarterly basis or more frequently as needed. The board of directors also receives updates from our CSO and CISO on our cyber risk management program and other matters relating to our data privacy and cybersecurity approach, including risk mitigations to bolster and enhance our data protection and data governance framework. Members of our board of directors receive presentations that include cybersecurity topics and the management of key cybersecurity risks from our CSO and CISO as part of the continuing education of our board of directors on topics that impact public companies.
Our management team, including our CSO and CISO, is responsible for assessing and managing our material risks from cybersecurity threats and for our overall cybersecurity risk management program on a day-to-day basis, and supervises both our internal cybersecurity personnel and the relationship with our retained external cybersecurity consultants. Our CSO’s and CISO’s experience includes years of working in the cybersecurity field in various industries, including the financial services industry .
ITEM 2. PROPERTIES
We are a remote-first company, meaning that for the vast majority of roles, our employees have the option to work remotely. Substantially all of our executive team meetings are held virtually, with meetings occasionally held in-person at locations that are either not in our offices or in various of our offices distributed around the world. We hold all of our shareholder meetings virtually. As a result of this strategy, we do not maintain a headquarters, but do currently lease physical offices in select major cities in the United States and other countries around the world for purposes of collaboration. See Note 13. Other
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Consolidated Balance Sheets Details of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should we need additional physical office space, suitable additional space will be available in the future.
ITEM 3. LEGAL PROCEEDINGS
For a description of material legal proceedings in which we are involved, see Note 21. Commitments and Contingencies of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.
We are not presently a party to any other legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. However, we are subject to regulatory oversight by numerous state, federal, and foreign regulators and we are and we may become subject to various legal proceedings, inquiries, investigations, and demand letters that arise in the course of our business. For example, we have received investigative subpoenas and other inquiries from various state agencies and attorneys general for documents and information pertaining to our business practices and policies, customer complaints, asset launches, certain ongoing litigation, and certain transfers of crypto assets. In addition, we have received investigative subpoenas and demand letters from various regulators for documents and information, including about certain customer programs, operations, and existing and intended future products, including our processes for listing assets, the classification of certain listed assets, our staking programs, and our stablecoin and yield-generating products. We intend to cooperate fully with such investigations. These examples are not exhaustive.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information for Common Stock
Our Class A common stock began trading on the Nasdaq Global Select Market under the symbol “COIN” on April 14, 2021. Prior to that date, there was no public trading market for our Class A common stock.
Our Class B common stock is not listed or traded on any stock exchange.
Holders of Record
As of February 5, 2026, there were 294 registered holders of record of our Class A common stock and 9 registered holders of record of our Class B common stock. Since many of our shares of Class A common stock are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
Dividend Policy
We have never declared or paid cash dividends on our capital stock. We are not obligated to pay any dividends on our Class A common stock or Class B common stock, and we currently do not anticipate paying any dividends on our capital stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial
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condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
Stock Performance Graph
The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Exchange Act or Securities Act.
The graph below compares the cumulative total return to shareholders of our Class A common stock between April 14, 2021 (the date our Class A common stock commenced trading on the Nasdaq Global Select Market) and December 31, 2025 relative to the Nasdaq Composite Index, the Nasdaq U.S. Benchmark Financial Services Index, the S&P 500 Index (“the S&P 500”), the S&P North American Technology Index, and the price of Bitcoin. The graph assumes the investment of $100 in our Class A common stock at the closing sale price of $328.28 per share on April 14, 2021, and in each index and assumes the reinvestment of dividends, if any. On May 19, 2025, we were added to the S&P 500. Going forward, we have elected to replace the Nasdaq Composite Index and the Nasdaq U.S. Benchmark Financial Services Index with the S&P 500, as we believe this index is a more relevant benchmark to measure our performance. We have continued to present the Nasdaq Composite Index and the Nasdaq U.S. Benchmark Financial Services Index in this Annual Report on Form 10-K as a transitional measure.
The historical data shown below should not be considered an indication of potential future stock price performance. Historical Bitcoin prices are primarily based on data obtained from our platform. Where such data is not available (e.g. during a platform outage), such data may sometimes be sourced from other third-party exchanges or data providers.
Recent Sales of Unregistered Securities
In connection with our acquisition of Gm Echo Ltd (“Echo”), on October 8, 2025, we issued 640,658 shares of our Class A common stock (the “Echo Shares”) in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act (or Regulation D or Regulation S promulgated thereunder) in a
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transaction by an issuer not involving a public offering. The recipients of the Echo Shares represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the book-entry shares issued in the transaction. All recipients of the Echo Shares either received adequate information about us or had access, through their relationships with us, to such information.
Issuer Purchases of Equity Securities
In October 2024, our board of directors authorized and approved a share repurchase program, which provided for the repurchase of up to $1.0 billion of our outstanding Class A common stock without expiration. In October 2025, our board of directors (i) increased the aggregate repurchase authorization under the program from $1.0 billion to $2.0 billion and (ii) expanded the scope of the repurchases to include a portion of the aggregate principal amount of our outstanding 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and both series of Senior Notes (collectively, the “Notes”). In January 2026, our board of directors approved a $2.0 billion increase in the authorization of our previously announced repurchase program from $2.0 billion to $4.0 billion (as modified, the “Repurchase Program”). Repurchases may be made from time to time in the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, in a tender offer, or by other methods in accordance with the applicable federal and state laws and regulations. The timing and amount of any repurchases will depend on market conditions and other considerations, and will be made at management’s discretion. The Repurchase Program does not obligate us to repurchase any dollar amount or number of shares of our Class A common stock or Notes and may be modified, suspended, or discontinued at any time.
The following table contains information relating to the repurchases of our Class A common stock made by us in the three months ended December 31, 2025.
Period | Total Number of Shares Purchased | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| November 1 – November 30, 2025 | 2,753,290 | $ | 262.37 | 2,753,290 | $ | 1,277,620,066 | ||||||||||||||||||||
| December 1 – December 31, 2025 | 285,805 | 237.28 | 285,805 | 1,209,804,500 | ||||||||||||||||||||||
| 3,039,095 | 3,039,095 | |||||||||||||||||||||||||
(1)Average price paid per share includes commissions related to repurchases.
(2)Share counts reported in this table are recognized on a settlement date basis. Excluded from this table are 261,933 shares repurchased at an average price of $228.99 on a trade date of December 31, 2025 with a settlement date of January 2, 2026.
The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards. See the Consolidated Statements of Changes in Shareholders’ Equity included in Part II, Item 8 of this Annual Report on Form 10-K for quantification of all shares repurchased by us during the periods presented.
ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled Risk Factors in Part I, Item 1A of this Annual Report on Form 10-K. Unless otherwise expressly stated or the context otherwise requires, references to “we,” “our,” “us,” “the Company,” and “Coinbase” refer to Coinbase Global, Inc. and its consolidated subsidiaries. For all narrative provided in this Item 7, two numbers presented consecutively represent figures for the year ended December 31, 2025 as compared to the year ended December 31, 2024, respectively, unless otherwise noted. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on February 13, 2025, which is incorporated by reference herein.
Executive Overview
This executive overview of Management’s Discussion and Analysis of Financial Condition and Results of Operations highlights selected information and does not contain all of the information that is important to readers of this Annual Report on Form 10-K.
During 2025, we continued to make progress towards our mission by expanding access to trading through innovative derivative products, listing more spot assets, and expanding our offerings in markets globally. We completed the acquisition of Deribit in August, which we believe will play a key role in our goal to be the premier global platform for crypto derivatives, and we launched U.S. perpetual-style futures. Stablecoin adoption is accelerating. USDC reached an all-time high in market capitalization, as did USDC held in Coinbase products. We are scaling payments infrastructure, expanding distribution with new partnerships, and extending utility for everyday spending with the Coinbase One Card.
For the year ended December 31, 2025, our net revenue was $6.9 billion, including $4.1 billion in transaction revenue and $2.8 billion in subscription and services revenue. For the year ended December 31, 2024, our net revenue was $6.3 billion, including $4.0 billion in transaction revenue and $2.3 billion in subscription and services revenue.
For the year ended December 31, 2025, our net income was $1.3 billion and Adjusted EBITDA was $2.8 billion. For the year ended December 31, 2024, our net income was $2.6 billion and Adjusted EBITDA was $3.3 billion.
For 2026, with growing regulatory clarity, we believe we are well-positioned to drive crypto’s role in global GDP through the Everything Exchange and by advancing stablecoin adoption with USDC, including scaling payments. We are working to further grow assets on our platform, and in turn revenue, as customers discover and adopt more products where their assets already reside. Despite multiple Federal Funds Rate decreases in late 2024 and 2025, future interest rate decreases are not certain. If interest rates continue to decline, they may materially impact our subscription and services and other revenue. We plan to dynamically adjust our expense base in order to be responsive to market conditions and revenue opportunities, increasing or decreasing it as needed, especially with respect to certain variable expenses. In the first quarter of 2026, we expect the aggregate of technology and development and general and administrative expenses to generally be in line with that of the fourth quarter of 2025. Additionally, we expect sales and marketing expenses to be roughly in line with or lower than those of the fourth quarter of 2025, reflecting the anticipated timing and scope of marketing opportunities.
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Key Business Metrics
In addition to the measures presented in our Consolidated Financial Statements, we use the key business metrics listed below to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions:
| Year Ended December 31, | Change | ||||||||||||||||
| 2025 | 2024 | % | |||||||||||||||
MTUs(1) (in millions) | 9.2 | 8.4 | 10 | ||||||||||||||
Assets on Platform(2) (in billions) | $ | 376 | $ | 404 | (7) | ||||||||||||
Trading Volume(3) (in billions) | $ | 1,221 | $ | 1,189 | 3 | ||||||||||||
Net income (in millions) | $ | 1,260 | $ | 2,579 | (51) | ||||||||||||
Adjusted EBITDA(4) (in millions) | $ | 2,808 | $ | 3,348 | (16) | ||||||||||||
_____________
(1)Represents the annual average MTUs, calculated as the average of quarterly MTUs, which are derived from the average of each month’s MTUs in each respective quarter.
(2)Represents Assets on Platform as of December 31.
(3)Represents the total U.S. Dollar equivalent of Spot Trading Volume transacted through our platform. During the fourth quarter of 2025, we redefined Trading Volume to add half of the trade value of spot trades that are routed off our platform for fulfillment, in order to provide a more comprehensive view of Trading Volume that drives our transaction revenue. Prior period amounts have been recast to conform to the current period’s definition.
(4)See Non-GAAP Financial Measure below for a reconciliation of net income to Adjusted EBITDA and an explanation for why we consider Adjusted EBITDA to be a helpful metric for investors.
Monthly Transacting Users
We define a Monthly Transacting User (“MTU”) as a consumer who actively or passively transacts in one or more products on our platform at least once during the rolling 28-day period ending on the date of measurement. MTUs engage in transactions that generate transaction revenue or subscription and services revenue. Revenue-generating transactions include active transactions, such as buying or selling crypto assets or passive transactions such as earning staking rewards and USDC rewards. MTUs also engage in transactions that are non-revenue generating, such as consumers sending and receiving crypto assets between wallets and off-platform accounts on a non-expedited basis. MTUs may overstate the number of unique consumers due to differences in product architecture or user behavior.
MTUs increased for the year ended December 31, 2025 as compared to 2024, primarily due to an increase in users participating in rewards programs, by holding USDC or staking their assets, influenced by deeper integration of USDC across our products and expanded staking services.
Assets on Platform
We define Assets on Platform (“AOP”) as the total United States (“U.S.”) dollar equivalent value of crypto assets and payment stablecoins held or managed on behalf of customers in digital wallets on our platform, including our custody services but excluding assets for which the customer holds full or partial keys, calculated based on the market price on the date of measurement. AOP demonstrates the scale of balances held across our suite of products and services, the trust customers place in us to securely store their assets, and the underlying growth of the onchain economy. AOP also represents a monetization opportunity through our products and services, including from trading and the adoption and use of payment stablecoins, staking, custody, and institutional financing, when customers use these assets to engage with these products and services.
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The following table sets forth the value of AOP by asset (in millions, except percentages):
| December 31, | Change | ||||||||||||||||
| 2025 | 2024 | % | |||||||||||||||
| Bitcoin | $ | 252,803 | $ | 235,378 | 7 | ||||||||||||
| Ethereum | 56,229 | 54,209 | 4 | ||||||||||||||
| XRP | 17,233 | 16,501 | 4 | ||||||||||||||
| Solana | 13,319 | 21,298 | (37) | ||||||||||||||
| USDC | 9,261 | 6,091 | 52 | ||||||||||||||
Other crypto assets and payment stablecoins(1) | 27,284 | 70,557 | (61) | ||||||||||||||
| Total | $ | 376,129 | $ | 404,034 | (7) | ||||||||||||
__________________
(1)Includes various other crypto asset and payment stablecoin balances, none of which individually represented more than 5% of total AOP.
AOP at December 31, 2025 decreased as compared to December 31, 2024, primarily reflecting a $77.0 billion aggregate decline in prices of most assets, offset in part by growth attributable to units, primarily Bitcoin.
Trading Volume
We define Trading Volume as the total U.S. dollar equivalent value of spot matched trades transacted between a buyer and seller through our platform, plus half of the value of trades that we routed off our platform for fulfillment, during the period of measurement. Trading Volume does not include volume from other trading products, such as derivatives, equities, or event contracts, but may in the future as those become more material. Trading Volume represents the product of the quantity of assets transacted and the trade price at the time the transaction was executed. As trading activity directly impacts transaction revenue, we believe this measure is a reflection of liquidity on our order books, trading health, and the underlying growth of the onchain economy. Institutions incur lower fees per transaction than consumers and, as a result, the impact of changes in consumer Trading Volume on transaction revenue is more pronounced than the impact of changes in institutional Trading Volume. Within consumer, Advanced traders incur lower fees per transaction than Simple traders, and therefore a shift in the mix of trading between these consumers impacts transaction revenue.
Generally, Trading Volume is primarily influenced by overall market dynamics, namely the price of crypto assets, crypto asset volatility, and macroeconomic conditions, and by our share of total crypto market spot trading volume. In periods of high crypto asset prices and crypto asset volatility, we have generally experienced correspondingly high levels of Trading Volume. In recent quarters, we have also seen market events, product announcements, paid incentives, and competition as influential factors. Trading activity generally directly impacts transaction revenue. However, during periods when new products or markets are being introduced or entered, associated trading volume may not directly impact revenue within the same period, or may impact it indirectly.
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| Year Ended December 31, | Change | ||||||||||||||||
| 2025 | 2024 | % | |||||||||||||||
Trading Volume(1) (in billions) | |||||||||||||||||
Consumer | $ | 239 | $ | 224 | 7 | ||||||||||||
Institutional | 982 | 965 | 2 | ||||||||||||||
Total Trading Volume | $ | 1,221 | $ | 1,189 | 3 | ||||||||||||
Trading Volume by crypto asset | |||||||||||||||||
| Bitcoin | 29 | % | 33 | % | (12) | ||||||||||||
Ethereum | 16 | 13 | 23 | ||||||||||||||
| USDT | 6 | 12 | (50) | ||||||||||||||
Other crypto assets(2) | 49 | 42 | 17 | ||||||||||||||
Total | 100 | % | 100 | % | |||||||||||||
____________________________________
(1)During the fourth quarter of 2025, we redefined Trading Volume to add half of the trade value of spot trades that are routed off our platform for fulfillment, in order to provide a more comprehensive view of Trading Volume that drives our transaction revenue. Prior period amounts have been recast to conform to the current period’s definition.
(2)Includes various other crypto assets, none of which individually represented more than 10% of our total Trading Volume.
For the year ended December 31, 2025 as compared to 2024, Trading Volume increased primarily reflecting an increase of 9% in global crypto market spot trading volume (the USD equivalent value of all matched trades transacted between buyers and sellers across all exchanges), offset in part by a decrease of $101.0 billion attributed to a decline in our share of stablecoin pair market volume driven by an intentional pricing change made in March of 2025 as we evolved our stablecoin strategy.
Results of Operations
Comparison of the years ended December 31, 2025 and 2024
Revenue
For the years ended December 31, 2025 and 2024 we generated 84% and 83%, respectively, of total revenue in the U.S., with no other country contributing over 10%. International revenue comprised mainly transaction revenue.
Transaction revenue
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Consumer, net | $ | 3,322,835 | $ | 3,430,322 | $ | (107,487) | (3) | |||||||||||||||||||
| Institutional, net | 479,667 | 345,598 | 134,069 | 39 | ||||||||||||||||||||||
| Other transaction revenue, net | 252,888 | 210,193 | 42,695 | 20 | ||||||||||||||||||||||
| Total transaction revenue | $ | 4,055,390 | $ | 3,986,113 | $ | 69,277 | 2 | |||||||||||||||||||
| % of net revenue | 59 | 63 | ||||||||||||||||||||||||
Transaction revenue increased for the year ended December 31, 2025 as compared to 2024, primarily reflecting:
•a decrease in consumer transaction revenue driven by:
◦a decrease of $384.4 million attributed to a lower average blended fee rate, primarily due to changes in the mix of Trading Volume from Simple users to Advanced and Coinbase One users who pay lower average fees; offset in part by
◦an increase of $277.0 million attributed to a 7% increase in consumer Trading Volume; and
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•an increase in institutional transaction revenue driven by an increase of $152.0 million attributed to derivatives trading, due mainly to the acquisition of Deribit.
There were no material changes to note within other transaction revenue.
The percentage of transaction revenue from spot trading on our platform by crypto asset was as follows:
| Year Ended December 31, | Change | |||||||||||||||||||
| 2025 | 2024 | % | ||||||||||||||||||
| Bitcoin | 27 | % | 30 | % | (10) | |||||||||||||||
| XRP | 14 | 6 | 133 | |||||||||||||||||
Ethereum | 12 | 13 | (8) | |||||||||||||||||
Other crypto assets(1) | 47 | 51 | (8) | |||||||||||||||||
| Total | 100 | % | 100 | % | ||||||||||||||||
(1)Includes various other crypto assets, none of which individually represented more than 10% of our total transaction revenue from spot trading on our platform.
Subscription and services revenue
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Stablecoin revenue | $ | 1,348,821 | $ | 910,464 | $ | 438,357 | 48 | |||||||||||||||||||
| Blockchain rewards | 677,405 | 705,757 | (28,352) | (4) | ||||||||||||||||||||||
| Interest and finance fee income | 247,047 | 265,799 | (18,752) | (7) | ||||||||||||||||||||||
| Other subscription and services revenue | 554,775 | 425,113 | 129,662 | 31 | ||||||||||||||||||||||
| Total subscription and services revenue | $ | 2,828,048 | $ | 2,307,133 | $ | 520,915 | 23 | |||||||||||||||||||
| % of net revenue | 41 | 37 | ||||||||||||||||||||||||
Subscription and services revenue increased for the year ended December 31, 2025 as compared to 2024, reflecting:
•increases in stablecoin revenue of:
◦$417.7 million due to higher average USDC balances held in Coinbase products1; and
◦$314.1 million due to higher average USDC off-platform balances; offset in part by
◦a decrease of $290.8 million due to lower average interest rates, which declined 89 basis points; and
•an increase in other subscription and services revenue, primarily due to a higher number of Coinbase One paid subscribers.
There were no material changes to note within blockchain rewards or interest and finance fee income.
Other revenue
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Corporate interest and other income | $ | 297,887 | $ | 270,782 | $ | 27,105 | 10 | |||||||||||||||||||
| Total other revenue | $ | 297,887 | $ | 270,782 | $ | 27,105 | 10 | |||||||||||||||||||
1 Includes corporate USDC balances and USDC held on behalf of customers in eligible Coinbase products.
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Other revenue increased for the year ended December 31, 2025 as compared to 2024, largely reflecting an increase of $85.3 million due to higher average cash and cash equivalents balances, offset by lower average interest rates earned on these balances, which declined 89 basis points.
Operating expenses
Certain prior period amounts have been reclassified to conform to the current period presentation.
Transaction expense
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Blockchain rewards fees | $ | 427,506 | $ | 455,946 | $ | (28,440) | (6) | |||||||||||||||||||
| Transaction rebates and commissions | 221,471 | 122,372 | 99,099 | 81 | ||||||||||||||||||||||
| Payment processing and account verification | 194,587 | 150,897 | 43,690 | 29 | ||||||||||||||||||||||
| Transaction reversal losses | 132,671 | 79,639 | 53,032 | 67 | ||||||||||||||||||||||
| Other | 43,995 | 88,853 | (44,858) | (50) | ||||||||||||||||||||||
| Total transaction expense | $ | 1,020,230 | $ | 897,707 | $ | 122,523 | 14 | |||||||||||||||||||
| % of net revenue | 15 | 14 | ||||||||||||||||||||||||
Transaction expense increased for the year ended December 31, 2025 as compared to 2024, reflecting:
•higher transaction rebates and commissions, primarily those earned by institutional customers providing liquidity on our international exchange, driven by growth in volume; and
•an increase in transaction reversal losses primarily driven by higher transaction volume; offset in part by
•a decrease in blockchain transaction fees within other, primarily due to lower average Ethereum gas fees.
There were no material changes to note within blockchain rewards fees or payment processing and account verification.
Technology and development
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Employee-related | $ | 1,052,597 | $ | 1,036,656 | $ | 15,941 | 2 | |||||||||||||||||||
| Website hosting and infrastructure | 322,125 | 228,392 | 93,733 | 41 | ||||||||||||||||||||||
| Amortization, depreciation, and impairment | 157,067 | 122,595 | 34,472 | 28 | ||||||||||||||||||||||
| Other | 138,816 | 80,609 | 58,207 | 72 | ||||||||||||||||||||||
| Total technology and development | $ | 1,670,605 | $ | 1,468,252 | $ | 202,353 | 14 | |||||||||||||||||||
| % of net revenue | 24 | 23 | ||||||||||||||||||||||||
Technology and development expenses increased for the year ended December 31, 2025 as compared to 2024, reflecting:
•changes in employee-related expenses driven by higher average headcount supporting international expansion and new product initiatives, offset in part by lower stock-based compensation expense (see Note 16. Stock-Based Compensation of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details) primarily associated with non-recurring awards; and
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•an increase in website hosting and infrastructure expenses driven by initiatives to increase capacity and scalability to support activity on our platform.
There were no material changes to note within amortization, depreciation, and impairment, or other.
Sales and marketing
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| USDC rewards | $ | 441,347 | $ | 224,255 | 217,092 | 97 | ||||||||||||||||||||
| Marketing programs | 402,555 | 247,087 | 155,468 | 63 | ||||||||||||||||||||||
| Employee-related | 136,229 | 151,036 | (14,807) | (10) | ||||||||||||||||||||||
| Other | 78,446 | 32,066 | 46,380 | 145 | ||||||||||||||||||||||
| Total sales and marketing | $ | 1,058,577 | $ | 654,444 | $ | 404,133 | 62 | |||||||||||||||||||
| % of net revenue | 15 | 10 | ||||||||||||||||||||||||
Sales and marketing expenses increased for the year ended December 31, 2025 as compared to 2024, primarily due to:
•an increase in USDC rewards primarily reflecting growth in average customer USDC balances held in Coinbase products2 as we continue to integrate USDC across our products; and
•an increase in marketing program expenses largely due to higher digital advertising and brand spend, including corporate sponsorships and go-to-market efforts.
There were no material changes to note within employee-related or other.
General and administrative
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Employee-related | $ | 664,761 | $ | 606,554 | $ | 58,207 | 10 | |||||||||||||||||||
| Professional services | 292,599 | 202,956 | 89,643 | 44 | ||||||||||||||||||||||
Customer support(1) | 224,193 | 124,940 | 99,253 | 79 | ||||||||||||||||||||||
| Other | 438,089 | 365,807 | 72,282 | 20 | ||||||||||||||||||||||
| Total general and administrative | $ | 1,619,642 | $ | 1,300,257 | $ | 319,385 | 25 | |||||||||||||||||||
| % of net revenue | 24 | 21 | ||||||||||||||||||||||||
(1)Excludes employee-related and professional services expenses.
General and administrative expenses increased for the year ended December 31, 2025 as compared to 2024, primarily due to:
•an increase in employee-related expenses primarily due to higher average headcount;
•an increase in professional services due to increased use of legal advisory services, including those relating to business combinations and strategic investments; and
•an increase in customer support costs as a result of increased capacity needs and enhancement of our customer service function.
There were no material changes to note within other.
2 Comprises USDC held on behalf of customers in eligible Coinbase products.
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Losses (gains) on crypto assets held for operations, net
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Losses (gains) on crypto assets held for operations, net | $ | 20,704 | $ | (71,725) | $ | 92,429 | (129) | |||||||||||||||||||
Changes in losses (gains) on crypto assets held for operations, net resulted primarily from holding these assets during a period of declining crypto asset prices, particularly in the fourth quarter of 2025. Though both gross inflows and outflows of these assets were approximately $1.6 billion and $1.5 billion during the years ended December 31, 2025 and 2024, respectively, gains and losses on changes in the fair value of the assets were limited as these assets are converted to cash or used for expenses nearly immediately after receipt.
Other operating expense, net
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Platform-related incidents | $ | 345,210 | $ | 28,070 | $ | 317,140 | nm | |||||||||||||||||||
| Other | 10,916 | (20,137) | 31,053 | (154) | ||||||||||||||||||||||
Total other operating expense, net | $ | 356,126 | $ | 7,933 | $ | 348,193 | nm | |||||||||||||||||||
nm - not meaningful
Other operating expense, net increased for the year ended December 31, 2025 as compared to 2024, primarily due to losses directly associated with the incident announced on the Current Report on Form 8-K we filed with the SEC on May 15, 2025 (the “Data Theft Incident”), comprising voluntary customer reimbursements and direct legal costs. There were no other material changes to note within other.
Interest expense
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Interest expense | $ | 85,413 | $ | 80,645 | $ | 4,768 | 6 | |||||||||||||||||||
There were no material changes to note within interest expense.
Losses (gains) on crypto assets held for investment, net
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Losses (gains) on crypto assets held for investment, net | $ | 528,857 | $ | (687,055) | $ | 1,215,912 | (177) | |||||||||||||||||||
Changes in losses (gains) on crypto assets held for investment, net resulted primarily from fair value remeasurement, particularly in the fourth quarter of 2025, of these assets, mainly Bitcoin and Ethereum. The impact of these changes in fair value expanded beginning late in the first quarter of 2025, as we have actively increased our investment in Bitcoin since then.
Other income, net
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| (Gains) losses on investments, net | $ | (680,520) | $ | 11,553 | $ | (692,073) | nm | |||||||||||||||||||
| Other | (20,374) | (40,627) | 20,253 | (50) | ||||||||||||||||||||||
| Total other income, net | $ | (700,894) | $ | (29,074) | $ | (671,820) | nm | |||||||||||||||||||
nm - not meaningful
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Other income, net changed for the year ended December 31, 2025 as compared to 2024, due to a gain on the sale of a portion of our investment in Circle Internet Group, Inc. and fair value remeasurement of our remaining holding, both resulting from Circle’s initial public offering in June 2025. There were no material changes to note within other.
Provision for income taxes
| Year Ended December 31, | Change | |||||||||||||||||||||||||
(in thousands, except %) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Provision for income taxes | $ | 261,738 | $ | 363,578 | $ | (101,840) | (28) | |||||||||||||||||||
For the year ended December 31, 2025 as compared to 2024, the decrease in provision for income taxes was primarily due to lower pretax income, partially offset by lower tax benefits from stock-based compensation.
Non-GAAP Financial Measure
In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA, a non-GAAP financial performance measure, is useful information to help investors evaluate our operating performance because it: enables investors to compare this measure and component adjustments to similar information provided by peer companies and our past financial performance; provides additional company-specific adjustments for certain items that may be included in income from operations but that we do not consider to be normal, recurring, operating expenses (or income) necessary to operate our business given our operations, revenue generating activities, business strategy, industry, and regulatory environment; and provides investors with visibility to a measure management uses to evaluate our ongoing operations and for internal planning and forecasting purposes. For example:
•We believe it is useful to exclude certain non-cash expenses, such as depreciation and amortization and stock-based compensation, from Adjusted EBITDA because the amounts of such expenses can vary significantly from period to period and may not directly correlate to the underlying performance of our business operations.
•We believe it is useful to exclude certain items that we do not consider to be normal, recurring, cash operating expenses and therefore, not reflective of our ongoing business operations. For example, we exclude: (i) other income, net, as the income and expenses recognized in this line item are not part of our core operating activities and are considered non-operating activities under GAAP, (ii) gains and losses on crypto assets held for investment because such investments are considered primarily long-term holdings, and (iii) losses directly related to the Data Theft Incident, including voluntary customer reimbursements, direct legal costs, and reward payments, if any, in connection with the threat actor’s arrest and conviction. We do not plan on engaging in regular trading of crypto assets, and, as an operating company, our investing activities in crypto are not part of our revenue generating activities, which are primarily based on transactions on our platform and the sales of subscriptions and services.
•We believe Adjusted EBITDA is useful to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, interest expense, other income, net, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
Limitations of Adjusted EBITDA
We believe that Adjusted EBITDA may be helpful to investors for the reasons noted above. However, Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information
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presented in accordance with GAAP. There are a number of limitations related to Adjusted EBITDA rather than net income (loss), which is the nearest GAAP equivalent of Adjusted EBITDA. Some of these limitations are that Adjusted EBITDA excludes:
•provision for income taxes;
•interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us;
•depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
•stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;
•losses directly related to the Data Theft Incident, net of recoveries;
•net gains or losses on our crypto assets held for investment; and
•other income, net, which represents net gains or losses on investments and other financial instruments, and other non-operating income and expense activity.
In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of Adjusted EBITDA as a tool for comparison. A reconciliation is provided below for Adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of Adjusted EBITDA to net income, and not to rely on any single financial measure to evaluate our business.
The following table provides a reconciliation of net income to Adjusted EBITDA (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net income | $ | 1,260,327 | $ | 2,579,066 | |||||||
| Adjusted to exclude the following: | |||||||||||
| Provision for income taxes | 261,738 | 363,578 | |||||||||
| Interest expense | 85,413 | 80,645 | |||||||||
| Depreciation and amortization | 188,428 | 127,518 | |||||||||
| Stock-based compensation expense | 839,440 | 912,838 | |||||||||
Data Theft Incident losses, net | 345,179 | — | |||||||||
| Losses (gains) on crypto assets held for investment, net | 528,857 | (687,055) | |||||||||
Other income, net(1) | (700,894) | (29,074) | |||||||||
| Adjusted EBITDA | $ | 2,808,488 | $ | 3,347,516 | |||||||
__________________
(1)See Note 17. Other Consolidated Statements of Operations Details of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
Liquidity and Capital Resources
We continue to believe our existing cash, cash equivalents, and marketable investments, which totaled $11.6 billion as of December 31, 2025, will be sufficient in both the short and long term to meet our requirements and plans for cash, including meeting our working capital and capital expenditure requirements. Our ability to meet our requirements and plans for cash, including meeting our working capital and capital expenditure requirements, will depend on many factors, including market acceptance of crypto assets and blockchain technology, our growth, our ability to attract and retain customers on our
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platform, the continuing market acceptance of our products and services, the introduction of new subscription products and services on our platform, expansion of sales and marketing activities, and overall economic conditions. We anticipate satisfying both our short-term and long-term cash requirements with our existing cash and cash equivalents and with future cash flows from operations, future sales of marketable investments, and potential future equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of additional debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that restrict our operations.
Primary commitments
Long-term debt
As of December 31, 2025, our primary contractual obligation remained long-term debt, of which we held $7.3 billion in aggregate principal amount, including $1.3 billion that is due within the next 12 months and classified as a current liability.
In August 2025, we issued an aggregate principal amount of $1.5 billion convertible senior notes that mature on October 1, 2032, unless converted, repurchased, or redeemed on an earlier date, and an aggregate principal amount of $1.5 billion convertible senior notes that mature on October 1, 2029, unless converted or repurchased on an earlier date. As market conditions warrant, we may, from time to time, repurchase our outstanding long-term debt securities in the open market, in privately negotiated transactions, by exchange transaction, or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity, and other factors, and may be commenced or suspended at any time. See Note 11. Long-Term Debt of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
As of December 31, 2025 and 2024, our ratings with S&P Global Ratings were BB- for both issuer credit and senior unsecured debt. In August 2025, Moody’s Ratings announced an upgrade of our ratings from B2 to B1 for corporate family and from B1 to Ba2 for guaranteed senior unsecured notes.
Short-term borrowings
As of December 31, 2025, we also held short-term borrowings of $452.1 million, denominated in crypto assets and payment stablecoins, which we use to facilitate institutional financing. See Note 5. Collateralized Arrangements and Financing of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
Other contractual obligations
As of December 31, 2025, our other material contractual obligations consisted of the following (in thousands):
| Amounts Due | |||||||||||
| Next 12 Months | Total | ||||||||||
Non-cancelable purchase obligations(1) | $ | 169,886 | $ | 670,422 | |||||||
Operating leases(2) | 32,547 | 417,873 | |||||||||
Other commitments(3) | 180,493 | 180,493 | |||||||||
_______________
(1) Committed spend for non-cancellable purchase obligations greater than $2.0 million per obligation, primarily relating to technology. The increase from total purchase obligations of $198.5 million as of December 31, 2024 reflects the renewal of a multi-year technology services agreement.
(2) Primarily relates to corporate offices. The increase from total operating lease commitments of $132.3 million as of December 31, 2024, reflects new office leases in San Francisco, CA and New York, NY.
(3) Represents definitive agreements to acquire interests in entities.
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See Notes 13. Other Consolidated Balance Sheets Details, 18. Income Taxes, and 21. Commitments and Contingencies of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details relating to our short- and long-term material cash requirements and contractual obligations as of December 31, 2025.
Repurchase program
As of December 31, 2025, our board of directors had authorized an aggregate $2.0 billion to repurchase, without expiration, our outstanding Class A common stock and long-term debt (the “Repurchase Program”). As of December 31, 2025, approximately $1.2 billion remained available, and no long-term debt has been repurchased under the Repurchase Program. See Issuer Purchases of Equity Securities included in Part II, Item 5 of this Annual Report on Form 10-K for additional details.
Other resources and commitments
Crypto assets
We hold and use crypto assets for various purposes. Crypto assets held for operations are received in the ordinary course of business and are converted to cash or used to fulfill expenses, primarily blockchain rewards, nearly immediately. In order to facilitate institutional financing, we hold crypto assets we borrow, as well as crypto assets customers pledge as collateral against certain of our loans to them. We do not use these assets as a source of liquidity otherwise. Crypto assets held for investment are primarily long-term holdings and in certain cases fulfill capital requirements set by regulators (see also Capital requirements below). We do not plan to engage in regular trading of these crypto assets but may purchase additional crypto assets for investment as a buy and hold strategy. In case of a liquidity stress event, or for other episodic purposes, which may necessitate the use of these assets, we may change our policy and sell crypto assets held for investment to generate liquidity. During times of instability in the crypto assets market, we may not be able to sell our crypto assets at reasonable prices or at all. Our crypto assets held are considered less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. As of December 31, 2025, we held the following crypto assets: $120.8 million held for operations, $822.8 million held as collateral, $318.8 million that were borrowed, and $2.0 billion held for investment.
Customer assets and liabilities
Recognized customer assets and liabilities comprise customer custodial funds and corresponding customer custodial liabilities that represent our obligation to return these assets to the customers. We also securely store additional customer AOP that we do not recognize in our Consolidated Balance Sheets. We do not use customer assets as collateral for any loan, margin, rehypothecation, or other similar activities to which we or our affiliates are a party, without the customer’s consent.
Our business model does not expose us to liquidity risk if we have excessive redemptions or withdrawals from customers. As of December 31, 2025, we have not experienced excessive redemptions or withdrawals, or prolonged suspended redemptions or withdrawals, of crypto assets to date. See Risk Factors—Depositing and withdrawing crypto assets into and from our platform involves risks, which could result in loss of customer assets, customer disputes and other liabilities, which could adversely affect our business, operating results, and financial condition included in Part I, Item 1A of this Annual Report on Form 10-K for further information.
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Cash flows
The following table summarizes our Consolidated Statements of Cash Flows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 2,426,383 | $ | 3,103,935 | |||||||
| Net cash used in investing activities | (2,049,550) | (201,003) | |||||||||
| Net cash provided by financing activities | 740,282 | 2,903,078 | |||||||||
| Net increase in cash, cash equivalents, and restricted cash and cash equivalents | $ | 1,117,115 | $ | 5,806,010 | |||||||
| Change in customer custodial cash and cash equivalents | $ | (754,370) | $ | 1,634,934 | |||||||
Operating activities
Our largest source of cash provided by operating activities are revenues generated from transaction fees. Our primary uses of cash in operating activities include payments to employees for compensation, marketing programs, website hosting and infrastructure services, and professional services.
Net cash provided by operating activities decreased by $677.6 million for the year ended December 31, 2025 as compared to 2024 primarily due to:
•$311.2 million in cash used in 2025 related to the Data Theft Incident, for which impacted customers were voluntarily reimbursed; and
•an overall increase in other cash and cash equivalent expenses as we continue to grow our business; offset in part by
•cash and cash equivalents provided as a result of the $617.3 million increase in total revenue.
Investing activities
Net cash used in investing activities increased by $1.8 billion for the year ended December 31, 2025 as compared to 2024 as we invested more of our available cash and cash equivalents, including:
•$742.0 million in net cash and cash equivalents used for business combinations in 2025, primarily due to the completion of the Deribit acquisition in August;
•a $578.0 million increase in cash and cash equivalents used for net purchases of crypto assets held for investment; and
•a $614.0 million increase in cash and cash equivalents used for the origination of fiat and payment stablecoin loans, net of repayments, reflecting higher demand for institutional financing products.
Financing activities
Net cash provided by financing activities decreased by $2.2 billion for the year ended December 31, 2025 as compared to 2024 primarily due to:
•a $2.6 billion decrease in customer custodial funds;
•$790.2 million in cash used to repurchase approximately 3.0 million shares of our outstanding Class A common stock; and
•a $285.6 million decrease in cash used to pay taxes related to net share settlement of equity awards; offset in part by
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•a $1.6 billion net increase in proceeds from long-term debt, driven by the August 2025 issuance of our 2029 Convertible Notes and 2032 Convertible Notes, offset in part by prior year proceeds from the issuance of our 2030 Convertible Notes, less cash paid for associated capped calls.
Capital requirements
We are a highly regulated business subject to regulations on how we manage our liquidity, operations, and capital structure. As our primary operating subsidiary, Coinbase Inc. (“CB Inc.”) is subject to the most significant capital requirements, we seek to minimize surplus capital at other subsidiaries and hold surplus at CB Inc. See Business—Government Regulation and Risk Factors included in Part I, Item 1 and 1A, respectively, of this Annual Report on Form 10-K for additional details about these regulations.
We are required to hold corporate liquid assets at our subsidiaries to meet capital requirements established by our regulators based on the value of crypto assets and payment stablecoins held in custody. Our money-transmitting subsidiary, CB Inc., and our custodian subsidiary, Coinbase Custody Trust Company, LLC (“CCTC”), which is a fiduciary under New York State Law and a qualified custodian under the Investment Advisers Act of 1940, are required to maintain minimum net capital requirements under agreements with the New York State Department of Financial Services (“NYDFS”). These subsidiaries and other subsidiaries are also subject to maintenance capital requirements by other regulators both within the United States and internationally. As of December 31, 2025, we were in compliance with these capital requirements.
As of December 31, 2025, our net capital requirements by subsidiary consisted of the following (in millions):
| Net Capital | Required Net Capital(1) | Capital Surplus | ||||||||||||||||||
| CB Inc. | $ | 2,795 | $ | 1,166 | $ | 1,629 | ||||||||||||||
| CCTC | 745 | 336 | 409 | |||||||||||||||||
Other(2) | 687 | 74 | 613 | |||||||||||||||||
(1)Depending on the agreement between the subsidiary and the regulator, may include corporate holdings of cash and cash equivalents, Bitcoin, and Ethereum. Due to the volatility of crypto assets, Net Capital and Required Net Capital can fluctuate.
(2)Includes subsidiaries that are subject to requirements from regulators that allow for the intermediation of customer orders in derivatives markets or the operation of a regulated marketplace for the trading of such contracts.
Critical Accounting Estimates
Our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of our Consolidated Financial Statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows will be affected.
See Note 2. Summary of Significant Accounting Policies of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a summary of significant accounting policies and significant estimates and assumptions and their effects on our financial statements. Below are the significant estimates and assumptions that we consider critical because they involve a significant amount of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.
Business combinations, goodwill, and intangible assets
We determined that business combinations, goodwill, and intangible assets represent critical accounting estimates, as they involve significant judgment, estimates, and assumptions and to the extent
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that our estimates and assumptions materially change or if actual circumstances differ from those in the assumptions, our financial statements could be materially impacted.
We account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to non-crypto intangible assets. These intangible assets do not have observable prices and have primarily consisted of customer relationships, developed technology, licenses, trademarks and trade names, and non-compete agreements, which are subsequently measured at acquisition date fair value, less accumulated amortization. These estimates and assumptions can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the estimated useful lives. Changes in these assumptions could affect the carrying value of these assets. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates.
Goodwill
We perform an impairment test annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying value of goodwill might not be fully recoverable. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test. Alternatively, a company may elect to proceed directly to a quantitative goodwill impairment test. We do the former and assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test. We review factors including changes in our stock price, macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, changes in any key personnel, and any changes in the composition of the carrying amount of our assets. There were no changes to the qualitative factors considered indicating an impairment of goodwill for the reporting periods presented. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, our financial statements could be materially impacted. For the reporting periods presented, we determined that it was more likely than not that the fair value of our reporting unit was more than the respective related carrying amounts, including goodwill, and therefore we did not record any goodwill impairment.
Intangible assets
Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets assessed as having indefinite lives are not amortized, but are assessed for indicators that the useful life is no longer indefinite or for indicators of impairment each period. Indicators we review, as applicable, include whether there has been a significant adverse change in the extent or manner in which our assets are being used, a significant adverse change in legal factors affecting our assets, customer attrition, and/or a cash flow loss. Due to the dynamic nature of our business and the regulatory environment in which we operate, it is not practicable to model sensitivity of the valuation of these assets to these factors. Each reporting period, we evaluate the estimated remaining useful life of our intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. We did not identify indicators of impairment of our intangible assets during the reporting periods presented. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, our financial statements could be materially impacted.
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Investments
Strategic investments
We hold strategic investments in primarily privately held companies in the form of equity securities without readily determinable fair values in which we do not have a controlling interest or significant influence. The vast majority of these investments are accounted for under the measurement alternative method (“the measurement alternative”) and are measured at cost, less impairment, subject to upward and downward adjustments resulting from observable price changes for identical or similar investments of the same issuer (“pricing adjustments”). We determined that valuation of privately-held strategic investments represents a critical accounting estimate because impairment evaluations involve significant judgment, estimates, and assumptions, and to the extent that these estimates and assumptions change materially or if actual circumstances differ from those in the assumptions, our financial statements could be materially impacted.
Impairment
Privately-held strategic investments are evaluated quarterly for impairment. Our qualitative analysis includes a review of indicators such as: operating results when available, business prospects of the investees, changes in the regulatory and macroeconomic environment, observable price changes in similar transactions, and general market conditions of the geographical area or industry in which our investees operate. If indicators of impairment exist, we prepare quantitative measurements of the fair value of our equity investments using an Option-Pricing Model that uses publicly available market data of comparable companies and other unobservable inputs including expected volatility, expected time to liquidity, adjustments for other company-specific developments, and the rights and obligations of the securities we hold. When the quantitative remeasurements of fair value indicate an impairment exists, we write down the investment to its current fair value.
We anticipate volatility to our net income (loss) in future periods due to changes in the fair values associated with these investments and changes in observable prices and similar transactions that could impact our fair value assessments. Based on future market conditions, these changes could be material to our financial statements. For more information regarding these market conditions and related sensitivity, see Marketable and Strategic Investments—Strategic investments included in Part II, Item 7A of this Annual Report on Form 10-K. See Note 14. Fair Value Measurements of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for details of changes in our strategic investments for the years ended December 31, 2025 and 2024.
Income taxes
We determined that income taxes involve critical accounting estimates because management makes significant estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets, and to the extent that our estimates and assumptions materially change, or if actual circumstances differ materially from those in the assumptions, our financial statements could be materially impacted.
We utilize the asset and liability method for computing our income tax provision. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. Assessing the need for a valuation allowance requires a great deal of judgment and we consider all available evidence, both positive and negative, to determine whether it is more likely than not that our deferred tax assets are recoverable. We evaluate all available evidence including, but not limited to, history of earnings and losses, forecasts of future taxable income, and the weight of evidence that can be objectively verified. See Note 18. Income Taxes of the Notes to our Consolidated
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Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for details of changes in our valuation allowance for the years ended December 31, 2025, 2024, and 2023.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized within the provision for income taxes. See Note 18. Income Taxes of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for details of changes in unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023.
For U.S. federal tax purposes, crypto asset transactions are treated under the same tax principles as property transactions. We recognize a gain or loss when crypto assets are exchanged for other property, in the amount of the difference between the fair market value of the property received and the tax basis of the exchanged crypto assets. Receipts of crypto assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.
Legal and other contingencies
We are subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain, and such uncertainty may be enhanced due to the industry in which we operate. We record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. In addition, we record recoveries of these losses when it is probable that they will be collected. These estimates are highly sensitive to change and involve variables that are not completely within our control nor practicable to model, including decisions made by regulators and settlement negotiations. Resolution of legal and other contingencies in a manner inconsistent with management’s expectations could have a material impact on our financial condition and results of operations. See Results of operations—Comparison of the years ended December 31, 2025 and 2024—Operating expenses—General and administrative above for discussion of material changes in legal and other contingencies during the years ended December 31, 2025 and 2024.
Recent accounting pronouncements
See Note 2. Summary of Significant Accounting Policies—Recent accounting pronouncements of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion about new accounting pronouncements adopted and not yet adopted as of the date of this report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk to our financial statements associated with the effect of changes in market factors, including risks associated with interest rates, foreign currency, derivatives, equity investments, and crypto assets. These assets, liabilities, and equities are held for purposes other than trading, except for our marketable investments which are available for trading.
Interest Rates
Our exposure to changes in interest rates primarily relates to interest earned on our cash and cash equivalents and customer custodial funds and from our arrangements with payment stablecoin issuers.
Our investment policy and strategy related to our cash and cash equivalents and customer custodial funds is to preserve capital and meet liquidity requirements without increasing risk. These funds consist of cash deposits, payment stablecoins, and money market funds, and therefore the fair value of our cash and cash equivalents and customer custodial funds would not be significantly affected by either an
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increase or a decrease in interest rates. However, the amount of interest we earn on certain of these balances, particularly the money market funds, may be significantly impacted. The Federal Reserve has adjusted the Federal Funds Rate significantly in recent years, including lowering it from a December 31, 2023 rate of 5.33%, a sustained peak, to 3.64% as of December 31, 2025. As a result, we believe additional changes in interest rates of this magnitude are reasonably possible. A hypothetical 150 basis points increase or decrease in average interest rates applied to our average month end cash equivalents balances, excluding payment stablecoins, for the years ended December 31, 2025 and 2024, would have resulted in an impact of $143.2 million and $124.3 million, respectively, on interest earned on these funds.
We earn stablecoin revenue from arrangements with payment stablecoin issuers, primarily from a USDC-related arrangement with Circle. Interest income is earned by Circle on USDC reserve balances held. Circle reported that, as of December 31, 2025, the underlying reserves were held in cash within segregated accounts titled for the benefit of USDC holders and a government money market fund that held cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements, and therefore the fair value of these balances would not be significantly affected by either an increase or a decrease in interest rates. However, the related amount of stablecoin revenue we earn may be significantly impacted. A hypothetical 150 basis points increase or decrease in average interest rates applied to daily USDC reserve balances held by Circle for the years ended December 31, 2025 and 2024, would have resulted in an impact of $540.3 million and $293.5 million, respectively, on stablecoin revenue. The increase in the hypothetical impact on stablecoin revenue since December 31, 2024 primarily reflects higher average USDC market capitalization.
Crypto Assets
We generate a large portion of our total revenue from transaction fees on our platform in connection with the purchase, sale, and trading of crypto assets by our customers. Transaction revenue is based on transaction fees that are either a flat fee or a percentage of the value of each transaction and may vary depending on payment type and the value of the transaction. We also generate a large portion of our total revenue from our subscription products and services, and such revenue has grown over time. Accordingly, crypto asset price risk could adversely affect our operating results. In particular, our future profitability may depend upon the market price of Bitcoin, Ethereum, and Solana, as well as other crypto assets. Crypto asset prices, along with our operating results, have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, Ethereum, Solana, and other crypto assets has in the past had and could in the future have an adverse effect on our earnings and our future cash flows. This may also affect our liquidity and ability to meet ongoing obligations.
In addition to the exposures described above, we hold crypto assets for various reasons. As of December 31, 2025, we held the following crypto assets: $2.0 billion held for investment; $318.8 million that were borrowed; $120.8 million held for operations; and $822.8 million held as collateral. In addition, as of December 31, 2025, customers had pledged $1.6 billion of crypto assets that are not recognized as collateral. See Note 2. Summary of Significant Accounting Policies of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion of these different categories of assets.
Crypto assets held for investment are primarily held long term, and historically, we have not attempted to reduce our market risk exposure associated with these crypto assets. Crypto asset prices have been volatile, as demonstrated by the one year historical volatility of Bitcoin and Ethereum of approximately 50% implied from the annualized standard deviation of daily price returns observed in the past 24 months. A hypothetical 50% increase or decrease in crypto assets prices as of December 31, 2025 and 2024 would result in a $1.0 billion and $776.5 million impact, respectively, to the value of our Crypto assets held for investment and would have been recorded as a gain or loss in Losses (gains) on crypto assets held for investment, net in our Consolidated Statements of Operations. The increase in the hypothetical gains or losses since December 31, 2024 reflects an increase in the units held, as we increased our investment in crypto assets during the year ended December 31, 2025, deploying available cash.
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Our market risk exposure on all remaining categories of crypto assets that we hold is limited, either due to their short-term nature or to naturally offsetting positions. Crypto assets held for operations are received as a form of payment and are converted to cash or used to fulfill expenses, primarily blockchain rewards, nearly immediately, and therefore are subject to limited market risk. A hypothetical 10% increase or decrease in crypto asset prices applied to the value of our Crypto assets held for operations as of December 31, 2025 and 2024, and applied to the simple average of our gross inflows and outflows of these assets for their weighted average period outstanding during 2025 and 2024, would not have a material impact on our Consolidated Financial Statements. Our market risk exposure on Crypto assets borrowed and Crypto assets held as collateral is limited through naturally offsetting positions of the crypto asset borrowings and obligation to return crypto asset collateral which contain embedded derivatives that are remeasured each reporting period. See —Borrowings and related collateral derivative positions below. Similarly, we do not have market risk exposure on crypto assets received but not recognized as collateral as we are obligated to return that collateral.
Marketable and Strategic Investments
We hold two categories of investments not denominated in crypto assets - marketable investments and strategic investments. Our marketable investments primarily comprise marketable equity securities and are available for trading, while our strategic investments are primarily held long term. Marketable investments may begin as strategic investments, as certain securities in which we take a stake for strategic purposes become publicly traded and our intentions with respect to these holdings change accordingly. We have not attempted to reduce our market risk exposure associated with any of these investments, and adjustments to the fair value of these investments, as well as realized gains or losses on sales, are recorded in Other expense (income), net in our Consolidated Statements of Operations.
Marketable investments
Our marketable investments are measured and recorded at fair value on a recurring basis, exposing us to risk that the fair value of these securities will decline due to changes in market prices. As of December 31, 2025, our marketable investments were $309.8 million. No marketable investments were held as of December 31, 2024. Adjustments to the fair value of these investments, as well as realized gains on sales of these investments, relate primarily to our investment in Circle Internet Group, Inc. See Notes 14. Fair Value Measurements and 17. Other Consolidated Statements of Operations Details of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
Changes in market prices of our marketable investments could materially impact our future results of operations and cash flows, the impact of which is difficult to predict as it depends on market factors that we cannot forecast with reliable accuracy, including due to lack of extended price history for our largest holding as it entered the public market in June 2025, and has had high price volatility since public debut. If an adverse 10% fair value remeasurement was applied to our marketable investments as of December 31, 2025, it would not have a material impact on our financial results.
Strategic investments
We hold strategic investments in privately held companies in the form of equity securities without readily determinable fair values in which we do not have a controlling interest or significant influence. These investments are subject to a wide variety of market and price-related risks due to the lack of readily available market data, which requires us to make significant estimates and assumptions that could substantially impact the carrying value of the investments. We perform a qualitative assessment of our portfolio of strategic equity investments on a quarterly basis for indicators of impairment. Our analysis includes a review of indicators such as: operating results when available; business prospects of the investees; changes in the regulatory and macroeconomic environment; observable price changes in similar transactions; and general market conditions of the geographical area or industry in which our
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investees operate. If indicators of impairment exist and the estimated fair value of an investment is below the carrying amount, we will write down the investment to fair value.
As of December 31, 2025 and 2024, our strategic equity investments in privately held companies were $623.0 million and $374.2 million, respectively. During the years ended December 31, 2025 and 2024, we recognized immaterial impairment expense related to our strategic investments in privately held companies. We anticipate volatility to our net income in future periods due to changes in the fair values associated with these investments and observable price changes in similar transactions that could impact our fair value assessments. Based on future market conditions, these changes could be material to our financial results. For more information, see Notes 2. Summary of Significant Accounting Policies—Investments and 14. Fair Value Measurements of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Foreign Currency
Foreign currency transactions
Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries. Our foreign currency exposure is primarily related to transactions denominated in Euros and British Pounds attributable to cash and cash equivalents, customer custodial funds and customer custodial fund liabilities, and intercompany transactions where the transaction currency is different from a subsidiary’s functional currency. Changes in foreign exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our results of operations as expressed in U.S. dollars. We have experienced and will continue to experience fluctuations in our results of operations and cash flows as a result of changes in foreign currency exchange rates, including from gains or losses on the settlement and the remeasurement of monetary assets and liabilities denominated in foreign currencies that are not the functional currency of the respective entity. From time to time, we may enter into derivatives or other financial instruments in an attempt to hedge our exposure to foreign currency exchange risk. No such instruments were outstanding as of December 31, 2025 and 2024 or during the year ended December 31, 2025.
Gains and losses on foreign currency exchange were immaterial during the years ended December 31, 2025 and 2024. If an adverse 10% foreign currency exchange rate change was applied to the largest foreign currency exposure (e.g., Euro) or to all foreign currency exposures in aggregate, of monetary assets, liabilities, and commitments denominated in currencies other than its functional currency as of December 31, 2025 and 2024, it would not have a material impact on our financial results. Our international operations expose us to exchange rate fluctuations otherwise. Such fluctuations could have a material impact on our future results of operations and cash flows, the impact of which is difficult to predict as it depends on many factors that we cannot forecast with reliable accuracy, including the volume and nature of our transactions and the particular currencies in which these transactions are denominated.
Foreign currency translation
Fluctuations in functional currencies from our net investment in international subsidiaries expose us to foreign currency translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon translation into U.S. dollars. See our Consolidated Statements of Comprehensive income in Part II, Item 8 of this Annual Report on Form 10-K for translation adjustments for the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025 and 2024, a 10% increase or decrease in foreign currency exchange rates used in translating the financial statements of subsidiaries with functional currencies other than our reporting currency would not have a material impact on our financial results.
Derivatives
We have exposure to derivatives measured and recorded at fair value. Market risk on derivatives is the exposure created by potential fluctuations in market prices and other factors and is a function of the
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type of derivative product, the volume of transactions, the tenor and terms of the agreement, and the underlying volatility.
Strategic derivative positions
In certain market conditions, we may opportunistically employ derivative strategies within a disciplined risk management framework to attempt to hedge our exposure to foreign currency or crypto assets held for investment. We did not have any such positions as of December 31, 2025 or 2024.
Our remaining derivative positions, including all of those held during the periods presented, arise from our operations and reflect a strategy of largely mitigating these remaining exposures through naturally offsetting positions, regardless of whether hedge accounting is achieved. See below for a discussion of these derivatives.
Borrowings and related collateral derivative positions
Our market risk exposure on derivative crypto asset borrowings and obligations to return crypto asset collateral (when combined with their host contracts, “Gross Financing Derivatives”) is naturally offset, at least in part, by the associated non-derivative crypto assets borrowed, crypto assets held as collateral, and crypto asset loan receivables originated with borrowed assets, all of which are recorded and held at fair value. The following table summarizes our Gross Financing Derivatives and net exposures after considering the naturally offsetting non-derivative positions, related to our crypto asset borrowings and associated collateral (“Net Financing Positions”) (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Gross Financing Derivatives | $ | 1,155,009 | $ | 1,067,594 | |||||||
Net Financing Positions | $ | — | $ | — | |||||||
The following table presents the impact of changes in fair value of the derivatives noted above when considered gross and net of the naturally offsetting non-derivative positions in our Consolidated Statements of Operations (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Gains (losses) on Gross Financing Derivatives(1) | $ | 328,436 | $ | (114,521) | |||||||
Gains (losses) on Net Financing Positions(2) | $ | — | $ | — | |||||||
__________________
(1)Gains and losses on derivatives are recorded in our Consolidated Statements of Operations in the locations shown in Note 12. Derivatives of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
(2)Net gains and losses, after considering the associated naturally offsetting non-derivative positions, are recorded in Transaction expense in the Consolidated Statements of Operations.
As of December 31, 2025 and 2024, a hypothetical 50% increase or decrease in the fair value of these derivative positions, after considering the associated naturally offsetting positions, would not have a material impact on our Consolidated Financial Statements. This hypothetical 50% is calculated as discussed above under Crypto Assets, as the fair value of these derivatives is also derived primarily from the volatility of Bitcoin and Ethereum over a similar period.
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Other derivative positions
Our market risk exposure to derivatives arising from accounts receivable and payable denominated in crypto assets (when combined with their host contracts, “Other Derivatives”) represents unmitigated exposure. However, these assets and liabilities are short-term in nature. The following table summarizes these Other Derivatives exposures, on a gross basis, as the receivables and payables may be unrelated (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Gross Other Derivatives | $ | 34,468 | $ | 228,712 | |||||||
The following table presents the impact of changes in fair value of the derivatives noted above in our Consolidated Statements of Operations (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
(Losses) gains on Gross Other Derivatives(1) | $ | (11,053) | $ | 83,269 | |||||||
(1)Gains and losses on derivatives are recorded in our Consolidated Statements of Operations in the locations shown in Note 12. Derivatives of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
As of December 31, 2025 and 2024, a hypothetical 10% increase or decrease in the fair value of these Other Derivatives positions would not have a material impact on our Consolidated Financial Statements.
For more information on our derivatives, see Notes 2. Summary of Significant Accounting Policies—Derivative contracts, 5. Collateralized Arrangements and Financing, 7. Accounts Receivable, Net, 12. Derivatives, and 13. Other Consolidated Balance Sheets Details of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
| Index to Consolidated Financial Statements | Page | ||||
Reports of Independent Registered Public Accounting Firm (Deloitte - PCAOB ID | 112 | ||||
Consolidated Balance Sheets | 116 | ||||
Consolidated Statements of Operations | 117 | ||||
Consolidated Statements of Comprehensive Income | 118 | ||||
Consolidated Statements of Changes in Shareholders’ Equity | 119 | ||||
Consolidated Statements of Cash Flows | 120 | ||||
Notes to Consolidated Financial Statements | 121 | ||||
1. Nature of Operations | 121 | ||||
2. Summary of Significant Accounting Policies | 121 | ||||
3. Acquisitions | 135 | ||||
4. Revenue | 136 | ||||
5. Collateralized Arrangements and Financing | 137 | ||||
6. Crypto Assets Held for Operations | 139 | ||||
7. Accounts Receivable, Net | 140 | ||||
8. Crypto Assets Held for Investment | 140 | ||||
9. Software and Equipment, Net | 141 | ||||
10. Goodwill and Intangible Assets, Net | 141 | ||||
11. Long-Term Debt | 143 | ||||
12. Derivatives | 147 | ||||
13. Other Consolidated Balance Sheets Details | 149 | ||||
14. Fair Value Measurements | 150 | ||||
15. Capital Stock | 151 | ||||
16. Stock-Based Compensation | 152 | ||||
17. Other Consolidated Statements of Operations Details | 156 | ||||
18. Income Taxes | 157 | ||||
19. Net Income Per Share | 162 | ||||
20. Restructuring | 162 | ||||
21. Commitments and Contingencies | 163 | ||||
22. Related Party Transactions | 165 | ||||
23. Supplemental Disclosures of Cash Flow Information | 166 | ||||
24. Subsequent Events | 167 | ||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Coinbase Global, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Coinbase Global, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of Operations, Comprehensive Income, Changes in Shareholders’ Equity, and Cash Flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the financial statements, the Company has elected to change its method of accounting for payment stablecoins to classify them as cash equivalents and to apply the Company’s accounting policies for crypto lending, borrowing, and collateral to payment stablecoin lending, borrowing, and collateral in the years ended December 31, 2024 and December 31, 2023. Payment stablecoins include USDC, EURC, and PYUSD.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Crypto Assets Held in Cold Storage — including Corporate Crypto Assets, Payment Stablecoins and Customer Crypto Assets - Refer to Notes 2, 5, 6, 8, 12 and 21 of the financial statements
Critical Audit Matter Description
Crypto assets are generally accessible only by the possessor of the unique private key relating to the digital wallet in which the crypto assets are held. Accordingly, private keys must be safeguarded and secured in order to prevent an unauthorized party from accessing the crypto assets within a digital wallet. The Company holds crypto assets for its own use, and on behalf of customers, primarily in wallets within its cold storage environment. The loss, theft, or otherwise compromise of access to the private keys required to access the crypto assets in cold storage could adversely affect the Company’s ability to access the crypto assets within its environment. This could result in loss of corporate crypto assets or loss of crypto assets in custodial products on its platform held on behalf of its customers.
We identified crypto assets in cold storage as a critical audit matter due to the nature and extent of audit effort required to obtain sufficient appropriate audit evidence to address the risks of material misstatement related to the existence and rights & obligations of crypto assets in cold storage. The nature and extent of audit effort required to address the matter includes significant involvement of more experienced engagement team members and discussions and consultations with subject matter experts related to the matter.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to crypto assets in cold storage included the following, among others:
•We consulted with subject matter experts regarding our planned audit response to address risks of material misstatement of crypto assets in cold storage.
•We tested the effectiveness of controls within the Company’s private key management process including controls related to physical access, key generation, and segregation of duties across the processes.
•We tested the effectiveness of management’s reconciliation control of internal books and records to external blockchains.
•We tested the effectiveness of management’s control to record corporate crypto asset balances separately from customer crypto asset balances.
•We tested the effectiveness of controls within the processes of customer crypto asset deposits and customer crypto asset withdrawals.
•We obtained evidence corporate crypto asset balances are appropriately recorded separately from customer crypto assets.
•We utilized our proprietary audit tool to independently obtain evidence from public blockchains to test the existence of crypto asset balances.
•We obtained evidence that management has control of the private keys required to access crypto assets in cold storage through a combination of decoding cryptographic messages signed using selected private keys or through observing the movement of selected crypto assets.
/s/ Deloitte & Touche, LLP
February 12, 2026
We have served as the Company’s auditor since 2020.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Coinbase Global, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Coinbase Global, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 12, 2026, expressed an unqualified opinion on those financial statements.
As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Sentillia B.V., which was acquired on August 14, 2025, and whose financial statements constitute less than 1% of total assets and 2% of total revenue of the consolidated financial statement amounts as of and for the year ended December 31, 2025. Accordingly, our audit did not include the internal control over financial reporting at Sentillia B.V.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche, LLP
San Francisco, California
February 12, 2026
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Coinbase Global, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and cash equivalents | |||||||||||
| Customer custodial funds | |||||||||||
| Crypto assets held for operations | |||||||||||
| Loan receivables | |||||||||||
| Crypto assets held as collateral | |||||||||||
| Crypto assets borrowed | |||||||||||
| Accounts receivable, net | |||||||||||
| Marketable investments | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Crypto assets held for investment | |||||||||||
| Strategic investments | |||||||||||
| Deferred tax assets | |||||||||||
| Software and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Customer custodial fund liabilities | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Current portion of long-term debt | |||||||||||
| Short-term borrowings | |||||||||||
| Obligation to return collateral | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 21) | |||||||||||
| Shareholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Class A and B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Retained earnings | |||||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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Coinbase Global, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenue: | |||||||||||||||||
| Net revenue | $ | $ | $ | ||||||||||||||
| Other revenue | |||||||||||||||||
| Total revenue | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Transaction expense | |||||||||||||||||
| Technology and development | |||||||||||||||||
| Sales and marketing | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Losses (gains) on crypto assets held for operations, net | ( | ||||||||||||||||
| Crypto asset impairment, net | ( | ||||||||||||||||
| Restructuring | |||||||||||||||||
| Other operating expense, net | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| Operating income (loss) | ( | ||||||||||||||||
| Interest expense | |||||||||||||||||
| Losses (gains) on crypto assets held for investment, net | ( | ||||||||||||||||
| Other income, net | ( | ( | ( | ||||||||||||||
| Income (loss) before income taxes | ( | ||||||||||||||||
| Provision for (benefit from) income taxes | ( | ||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Net income attributable to common shareholders: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Weighted-average shares of common stock used to compute net income per share: | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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Coinbase Global, Inc.
Consolidated Statements of Comprehensive Income
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Translation adjustment | ( | ||||||||||||||||
| Income tax effect | ( | ( | |||||||||||||||
| Translation adjustment, net of tax | ( | ||||||||||||||||
| Comprehensive income | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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Coinbase Global, Inc.
Consolidated Statements of Changes in Shareholders' Equity
(In thousands)
| Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | |||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Issuance of equity instruments as consideration for business combination | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued to settle contingent consideration | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued in connection with equity awards, net of stock options repurchases | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock withheld for net share settlement of equity awards | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation (inclusive of capitalized stock-based compensation and restructuring) | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| — | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued in connection with equity awards, net of stock options repurchases | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock withheld for net share settlement of equity awards | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | — | — | |||||||||||||||||||||||||||||||
| Purchases of capped calls | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Other | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued as consideration for business combination | — | — | |||||||||||||||||||||||||||||||||
| Common stock issued in connection with equity awards | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock repurchased | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Common stock withheld for net share settlement of equity awards | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | — | — | |||||||||||||||||||||||||||||||
| Purchases of capped calls | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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Consolidated Statements of Cash Flows
(In thousands)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flows from operating activities | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||
| Losses (gains) on crypto assets held for operations, net | ( | — | |||||||||||||||
| Losses (gains) on crypto assets held for investment, net | ( | — | |||||||||||||||
| (Gains) losses on investments, net | ( | ( | |||||||||||||||
| Gains on extinguishment of long-term debt, net | ( | ||||||||||||||||
| Gains on crypto assets held, net (pre ASU 2023-08) | — | — | ( | ||||||||||||||
| Crypto asset impairment expense (pre ASU 2023-08) | — | — | |||||||||||||||
| Crypto assets received as revenue (pre ASU 2023-08) | — | — | ( | ||||||||||||||
| Crypto asset payments for expenses (pre ASU 2023-08) | — | — | |||||||||||||||
| Other operating activities, net | |||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable, net | ( | ( | |||||||||||||||
| Customer custodial funds in transit | ( | ||||||||||||||||
| Income taxes, net | ( | ||||||||||||||||
| Other current and non-current assets | ( | ||||||||||||||||
| Other current and non-current liabilities | ( | ||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||
| Loans originated | ( | ( | ( | ||||||||||||||
| Proceeds from repayment of loans | |||||||||||||||||
| Assets pledged as collateral | ( | ( | ( | ||||||||||||||
| Return of assets pledged as collateral | |||||||||||||||||
| Business combinations, net of cash and cash equivalents acquired | ( | ( | |||||||||||||||
| Purchases of crypto assets held for investment | ( | ( | — | ||||||||||||||
| Dispositions of crypto assets held for investment | — | ||||||||||||||||
| Purchase of investments | ( | ( | ( | ||||||||||||||
| Dispositions of investments | |||||||||||||||||
| Purchase of crypto assets held (pre ASU 2023-08) | — | — | ( | ||||||||||||||
| Sale of crypto assets held (pre ASU 2023-08) | — | — | |||||||||||||||
| Other investing activities, net | ( | ( | ( | ||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Cash flows from financing activities | |||||||||||||||||
| Issuance of common stock upon exercise of stock options, net of repurchases | |||||||||||||||||
| Issuances of convertible senior notes, net | |||||||||||||||||
| Repurchase of common stock | ( | ||||||||||||||||
| Repayment of long-term debt | ( | ||||||||||||||||
| Purchases of capped calls | ( | ( | |||||||||||||||
| Customer custodial fund liabilities | ( | ( | |||||||||||||||
| Customer collateral received | |||||||||||||||||
| Return of customer collateral | ( | ( | ( | ||||||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ( | ( | ||||||||||||||
| Proceeds from short-term borrowings | |||||||||||||||||
| Repayments of short-term borrowings | ( | ( | ( | ||||||||||||||
| Other financing activities, net | |||||||||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents | ( | ||||||||||||||||
| Effect of exchange rates on cash, cash equivalents, and restricted cash and cash equivalents | ( | ||||||||||||||||
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period | |||||||||||||||||
| Cash, cash equivalents, and restricted cash and cash equivalents, end of period | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
1. NATURE OF OPERATIONS
Coinbase, Inc. was founded in 2012. In April 2014, in connection with a corporate reorganization, Coinbase, Inc. became a wholly-owned subsidiary of Coinbase Global, Inc. (together with its consolidated subsidiaries, the “Company”). On December 15, 2025, the Company effected a reincorporation from the State of Delaware to the State of Texas (the “Reincorporation”).
The Company provides a trusted platform that serves as a compliant on-ramp to the onchain economy and enables users to engage in a wide variety of activities with their crypto assets in both proprietary and third-party product experiences enabled by access to decentralized applications. The Company offers (i) consumers their primary financial account for the onchain economy, (ii) institutions a full-service prime brokerage platform with access to deep pools of liquidity across the crypto marketplace, and (iii) developers a suite of products granting access to build onchain.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and preparation
The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries – entities in which the Company holds, directly or indirectly, more than 50% of the voting rights, or where it exercises control. The Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), and in management’s opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair presentation of the Company’s Financial Statements.
Preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions in the Consolidated Financial Statements and notes thereto.
Significant estimates and assumptions include the identification and valuation of assets acquired and liabilities assumed in business combinations; the valuation of goodwill and intangible assets, including impairments; the valuation of privately-held strategic investments, including impairments; the determination of the recognition, measurement, and valuation of current and deferred income taxes; the fair value of performance stock-based awards issued; the useful lives of long-lived assets; the impairment of long-lived assets; the fair value of derivatives and loss contingency identification and valuation, including assessing the likelihood of adverse outcomes from positions, claims, and disputes, recoveries of losses recorded, and associated timing.
Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. To the extent that there are material differences between these estimates and actual results, the Consolidated Financial Statements will be affected. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities.
Change in accounting principle
Accounting for payment stablecoins
Effective December 31, 2025, the Company voluntarily elected to change its method of accounting for payment stablecoins to classify them as cash equivalents and to apply the Company’s accounting policies for crypto lending, borrowing, and collateral to payment stablecoin lending, borrowing, and collateral. Payment stablecoins include USDC, EURC, and PYUSD. In prior periods, EURC and PYUSD balances were not material and were presented together with USDC; accordingly, references to “USDC” in prior
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
period disclosures include these stablecoins. The Company previously accounted for payment stablecoins as financial instruments under Accounting Standards Codification (“ASC”) 310, Receivables, and applied the recognition and derecognition criteria under ASC 860, Transfers and Servicing, when transferring (or receiving) payment stablecoins.
The Company believes the reclassification of USDC to Cash and cash equivalents is preferable because it better reflects its economic substance and the manner in which it is utilized by the Company. USDC is readily convertible to known amounts of cash, allowing for near-instant, one-to-one redemption of USDC for U.S. dollars. Furthermore, the underlying reserves backing USDC, comprising cash in segregated accounts titled for benefit of USDC holders and a government money market fund that holds cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements, exhibit the risk and liquidity characteristics of cash equivalents as defined in ASC 230, Statement of Cash Flows.
The Company further believes the application of our accounting policies for crypto lending, borrowing, and collateral to USDC lending, borrowing, and collateral is preferable as it aligns the accounting with our other crypto collateralized arrangements and financing activities and better reflects the risks and transfer of economic benefits of the related transactions.
This change in accounting principle has been applied retrospectively to all periods presented, including in the Consolidated Balance Sheets and Statements of Cash Flows. This reclassification had no effect on previously reported total assets, total liabilities, equity, net income, or earnings per share for any period presented.
The following tables show the changes in presentation in the Consolidated Balance Sheets and Statements of Cash Flows upon the Company’s change in accounting principle (in thousands):
Consolidated Balance Sheets Extract
| December 31, 2024 | |||||||||||||||||
Previously Reported | Adjustment | As Adjusted | |||||||||||||||
| Cash and cash equivalents | $ | $ | $ | ||||||||||||||
| Restricted cash and cash equivalents | |||||||||||||||||
| USDC | ( | ||||||||||||||||
| Loan receivables | |||||||||||||||||
| Net adjustment | $ | ||||||||||||||||
Consolidated Statements of Cash Flows Extracts
| Year Ended December 31, 2024 | |||||||||||||||||
Previously Reported | Adjustment | As Adjusted | |||||||||||||||
| Changes in operating assets and liabilities | $ | ( | $ | $ | |||||||||||||
| Loans originated | ( | ( | ( | ||||||||||||||
| Proceeds from repayment of loans | |||||||||||||||||
| Assets pledged as collateral | ( | ( | ( | ||||||||||||||
| Return of assets pledged as collateral | |||||||||||||||||
| Purchase of investments | ( | ( | ( | ||||||||||||||
| Dispositions of investments | |||||||||||||||||
| Purchases of crypto assets held for investment | ( | ( | ( | ||||||||||||||
| Dispositions of crypto assets held for investment | |||||||||||||||||
| Proceeds from short-term borrowings | |||||||||||||||||
| Repayments of short-term borrowings | ( | ( | |||||||||||||||
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Notes to Consolidated Financial Statements
| Year Ended December 31, 2023 | |||||||||||||||||
| Previously Reported | Adjustment | As Adjusted | |||||||||||||||
| Gains on crypto assets held, net (pre ASU 2023-08) | $ | ( | $ | $ | ( | ||||||||||||
| Changes in operating assets and liabilities | ( | ||||||||||||||||
| Loans originated | ( | ( | ( | ||||||||||||||
| Proceeds from repayment of loans | |||||||||||||||||
| Assets pledged as collateral | ( | ( | ( | ||||||||||||||
| Return of assets pledged as collateral | |||||||||||||||||
| Purchase of investments | ( | ( | ( | ||||||||||||||
| Dispositions of investments | |||||||||||||||||
| Purchase of crypto assets held (pre ASU 2023-08) | ( | ( | ( | ||||||||||||||
| Sale of crypto assets held (pre ASU 2023-08) | |||||||||||||||||
| Customer collateral received | |||||||||||||||||
| Return of customer collateral | ( | ( | ( | ||||||||||||||
Recent accounting pronouncements
Recently adopted accounting pronouncements
Disaggregation of income statement expenses
On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income, to expand income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company early adopted ASU 2024-03 on December 31, 2025 on a retrospective basis. See Note 17. Other Consolidated Statements of Operations Details for the disaggregation of relevant expense captions.
Accounting pronouncements pending adoption
On September 18, 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 amends ASC 350-40, Intangibles-Goodwill and Other-Internal Use Software, to reflect that software is not always developed in a linear manner, removing all references to development stages and adding new guidance on how to evaluate whether the probable-to-complete threshold has been met. ASU 2025-06 is required to be adopted for fiscal years commencing after December 15, 2027, with early adoption permitted. ASU 2025-06 allows for a prospective, retrospective, or modified transition approach to adoption, based on the status of the project and whether software costs were capitalized before the date of adoption. The Company anticipates using a prospective transition approach and is evaluating the impact of adopting the standard on the Consolidated Financial Statements.
Segment reporting
The Company reports its segment information to reflect the manner in which the CODM reviews and assesses performance. The Company’s Chief Executive Officer and President and Chief Operating Officer have joint responsibility as the CODM and review and assess the performance of the Company as a whole.
The primary financial measures used by the CODM to evaluate performance and allocate resources are net income and operating income (loss). The CODM uses net income and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income and Operating income (loss) is disclosed
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations.
Revenue recognition
Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration to which the Company expects to be entitled.
Transaction revenue
Consumer and institutional revenue
The Company earns transaction fees primarily from providing crypto asset matching services and executing trades on the Company’s derivative exchanges. The Company considers the matching of buyers and sellers to buy, sell or convert crypto assets or the execution of a derivative trade to be a single performance obligation. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed or the trade is executed. Contracts with customers are defined at the transaction level as they are open-ended and may be terminated by either party without penalty.
The transaction price, determined at the transaction level, is calculated based on volume and varies depending on payment type, transaction value, and the Company’s published fee disclosures. Transaction fees may be variable based on tiered discounts driven by trading volume in a prior historical period. Volume-based tiered discounts are not considered material rights as they correspond to the standalone selling prices typically offered to the respective customer class. Transaction fees are reduced by any transaction-specific rebates provided to the customer. In instances where transaction fees are collected in crypto assets, revenue is measured based on the fair value of the crypto assets received at the time of the transaction.
Transaction revenue is recognized net of an allowance for estimated transaction fee reversals (such as credit card chargebacks or bank disputes). These estimates are determined using the most likely amount method, relying on historical experience and judgment regarding the probability of significant reversals. These estimates of variable consideration are reassessed each reporting period. While the reversal of the transaction fee is recorded as a reduction of net revenue, any loss of the underlying crypto asset resulting from the reversal is included in Transaction expense.
The Company applies judgment to determine whether it is the principal or the agent in transactions. The Company evaluates the presentation of revenue on a gross or net basis based on whether it controls the crypto asset or derivative instrument before it is transferred to the customer (gross) or whether it acts as an agent by matching buyers and sellers of crypto assets or executing trades between customers (net). The Company does not control the crypto asset or derivative instrument provided before it is transferred to the buyer, does not have inventory risk, and is not responsible for fulfillment. The Company also does not set the price for the crypto asset or derivative instrument as the price is a market rate established by users of the platform. As a result, the Company has determined that it acts as an agent in transactions between customers.
Other transaction revenue
Other transaction revenue primarily comprises Base sequencer revenue and fees the Company charges customers at the transaction level to process deposits to, and withdrawals from, the Company’s platform. Generally, Other transaction revenue consists of a single performance obligation and is recognized at the time that a transaction is executed. Base sequencer revenue is denominated in crypto
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
assets, with revenue measured based on the amount of crypto assets received and the fair value of the crypto assets at the time of the transaction.
Subscription and services revenue
Stablecoin revenue
The Company earns revenue through an arrangement, as updated in August 2023 and further updated in November 2024, with Circle Internet Financial, LLC (“Circle”). The Company’s revenue from this arrangement is determined based on the daily income generated from the reserves backing USDC, which is dependent on the total USDC market capitalization, defined as the total amount of USDC in circulation, less the management fees charged by non-affiliated third parties managing such reserves and certain other expenses (the “Payment Base”). From the Payment Base, (i) Circle retains a portion in consideration of its role as issuer of USDC, (ii) the Company and Circle earn an amount based on the share of USDC held on their respective platforms, (iii) other approved participants in the USDC ecosystem earn an amount based on terms agreed between the approved participant, Circle, and the Company, and (iv) the Company receives 50% of the remaining Payment Base. The arrangement is not within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”) as Circle is not a customer of the Company. Revenue is accrued on a monthly basis as it becomes realizable.
Blockchain rewards
Blockchain rewards primarily comprises staking revenue, in which the Company participates in networks with proof-of-stake consensus algorithms through creating or validating blocks on the network using the staking validators that it controls. Blockchain protocols, or the participants that form the protocol networks, reward users for performing various activities on the blockchain. The Company considers itself the principal in transactions with the blockchain networks, and therefore presents such blockchain rewards earned on a gross basis. In exchange for participating in the consensus mechanism of these networks, the Company recognizes revenue in the form of the native token of the network. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete and the rewards are transferred into a digital wallet that the Company controls. Revenue is measured based on the number of tokens received and the fair value of the token at contract inception.
Interest and finance fee income
The Company holds customer custodial funds at certain third-party depository institutions and asset managers, which earn interest. Interest income earned from customer custodial funds is calculated using the interest method and is not within the scope of ASC 606. Financing interest income on fiat and payment stablecoin loan receivables is accrued using the interest method over the term of the loan, and is not within the scope of ASC 606. Financing fees earned on crypto asset loan receivables are denominated in crypto assets and are recognized on an accrual basis over the over term of the loan. The amount earned depends on the total loans issued and the contractual rates.
Other subscription and services revenue
Other subscription and services revenue primarily comprises revenue from: Coinbase One; developer product revenue, including items such as delegation, participation and infrastructure services; custodial fees for a dedicated cold storage solution provided to customers through Prime Custody; and revenue from other subscription licenses. Generally, revenue from other subscription and services contains one performance obligation, may have variable and non-cash consideration, and is recognized at a point in time or over the period that services are provided.
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Notes to Consolidated Financial Statements
Other revenue
Corporate interest and other income
Corporate interest and other income primarily comprises interest income earned on corporate cash and cash equivalents, calculated using the interest method and reported within Other revenue in the Consolidated Statements of Operations.
Collateralized arrangements and financing
Lending and related collateral
The Company lends fiat, payment stablecoins, crypto assets borrowed, and crypto assets held for investment to eligible institutional customers. Institutional financing loans may have open ended or fixed terms that are less than one year, with the exception of trade finance arrangements. These arrangements are typically settled in one to three days.
Loan receivables are recorded in Loan receivables in the Consolidated Balance Sheets. Fiat and payment stablecoin loan receivables are measured at amortized cost, which approximates fair value given their short-term nature (generally less than 12 months) and fully collateralized structure. Crypto asset loan receivables are measured at the fair value of the underlying crypto asset loaned, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Accrued interest is recorded separately within Accounts receivable, net in the Consolidated Balance Sheets. Fee income is recorded in Interest and finance fee income within Net revenue in the Consolidated Statements of Operations.
Institutional financing loans are fully collateralized by a customer’s pledged fiat, payment stablecoins, or crypto assets, as applicable. The Company adheres to strict internal risk management and liquidation protocols for loan counterparty defaults, including restricting trading and withdrawals and liquidating assets in borrowers’ accounts as contractually permitted. The Company continuously and systematically monitors the fair value of the related collateral assets pledged compared to the fair value of the related loan receivable, and if the value of the borrower’s eligible collateral falls below the required collateral requirement, the customer is obligated to deposit additional collateral up to the required collateral level. Accordingly, the Company applies the collateral maintenance provision practical expedient to determine if an allowance for doubtful accounts is required on loan receivables. The Company’s credit exposure is significantly limited and no allowance, write-offs, or recoveries have been recorded against loan receivables for the periods presented due to the collateral requirements the Company applies to such loans, the Company’s process for collateral maintenance, and collateral held on the Company’s platform. The Company would recognize credit losses on these loans if there is a collateral shortfall and it is not reasonably expected that the borrower will replenish such a shortfall. Due to the nature of the collateral the Company requires to be pledged, the Company is readily able to liquidate in the case of the borrower’s default.
The Company recognizes collateral it receives, with an associated obligation to return collateral, when it obtains control of the collateral. The Company does not reuse or rehypothecate customer payment stablecoins or crypto assets nor grant security interests in such assets, in each case unless required by law or expressly agreed to by the customer.
Crypto assets held as collateral are initially recorded at cost and are subsequently remeasured at fair value with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. Crypto assets held as collateral includes collateral within the Company’s control and may exceed the required contractual amounts. Crypto assets held as collateral are derecognized from the Consolidated Balance Sheets when the collateral is returned to the borrower or when the collateral is sold or rehypothecated. Gains and losses at the time of derecognition are determined on a weighted average cost basis.
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Notes to Consolidated Financial Statements
Obligation to return collateral in the form of crypto assets is accounted for as a hybrid instrument, with a liability host contract that contains an embedded derivative based on the changes in fair value of the underlying crypto asset. The gain or loss on remeasurement of the Obligation to return collateral is recorded in Transaction expense.
See Note 23. Supplemental Disclosures of Cash Flow Information for details on flows of non-cash collateral, including crypto assets.
Borrowings and related collateral
To facilitate institutional financing loans, the Company may borrow fiat, payment stablecoins and crypto assets from third parties.
Payment stablecoins borrowed by the Company that have not been subsequently sold or rehypothecated are recognized within Cash and cash equivalents with a corresponding liability in Short-term borrowings in the Consolidated Balance Sheets.
Crypto assets borrowed by the Company are recorded in Crypto assets borrowed, and the associated liabilities are recorded in Short-term borrowings in the Consolidated Balance Sheets.
Crypto assets borrowed are initially recorded at cost and are subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. Crypto assets borrowed are derecognized from the Consolidated Balance Sheets when they are used to originate loans with customers, in which case they are recorded as Loan receivables in the Consolidated Balance Sheets, or when they are repaid to third parties. Gains and losses at the time of derecognition are determined using the specific identification method.
Crypto asset borrowings are accounted for as hybrid instruments. The liability host contract is not accounted for as a debt instrument because it is not a financial liability and is carried at the initial fair value of the assets acquired. The embedded derivative relates to the changes in the fair value of the underlying crypto asset and is subsequently measured at fair value, with changes in fair value recognized in Transaction expense in the Consolidated Statements of Operations.
The term of these crypto asset borrowings either can be for a fixed term of less than one year or open-ended and repayable at the option of the Company or the lender. These borrowings bear a fee payable by the Company to the lender, which is based on a percentage of the amount borrowed. Fee expenses for crypto asset borrowings are accrued and expensed over the term of the loan and are included in Transaction expense in the Consolidated Statements of Operations.
Under the terms of the Company’s payment stablecoin and crypto asset borrowing arrangements, the Company may be required to maintain a collateral to borrowing ratio and pledge fiat, payment stablecoins, or crypto assets as collateral. The lender is not obligated to return collateral equal to the fair value of the borrowings if the Company defaults on its borrowings. As of December 31, 2025, the Company has not defaulted on any of its borrowings.
The Company’s accounting for pledged collateral is determined by whether control is retained or surrendered. The Company derecognizes collateral it pledges when it loses control of the collateral, resulting in the recognition of the related collateral receivable within Other current assets in the Consolidated Balance Sheets. When the Company retains control of the collateral, fiat and payment stablecoins pledged as collateral are reclassified to Restricted cash and cash equivalents and where crypto assets are pledged, the collateral remains recorded within Crypto assets borrowed or Crypto assets held for investment, each within the Consolidated Balance Sheets.
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
Customer derivatives and margin
The Company executes trade matching and other trading activities of derivative contracts between customers on its platform. These transactions are subject to margin requirements with customers to help the Company mitigate its exposure to credit risk from a customer’s failure to fulfill its obligations in a trade.
Crypto assets and payment stablecoins pledged by customers to meet margin requirements are not recognized in the Consolidated Balance Sheets unless the customer expressly agrees to transfer control to the Company, in which case they are recognized on the same basis as discussed in the Lending and related collateral section above. Fiat pledged by customers to meet margin requirements is recognized in Customer custodial funds with an offsetting liability in Customer custodial fund liabilities in the Consolidated Balance Sheets.
Cash and cash equivalents
Cash and cash equivalents comprise cash that is not restricted as to withdrawal or use, payment stablecoins, and interest-bearing highly liquid investments, such as money market funds with an initial maturity of three months or less, held in accounts at financial institutions or venues. Financial institutions include asset managers, while venues include payment processors, clearing brokers, and other financial services providers.
Payment stablecoins
Payment stablecoins, which include USDC, EURC, and PYUSD, are redeemable on a one-to-one basis for cash and cash equivalents and are classified as Cash and cash equivalents in the Consolidated Balance Sheets. As of December 31, 2025 and 2024, the reserves backing these payment stablecoins were held by the issuer in cash and cash equivalents in segregated accounts titled for the benefit of payment stablecoins holders.
Funds held at financial institutions
Cash and cash equivalents, excluding payment stablecoins which are held on our platform, are primarily placed with financial institutions which are of high credit quality, primarily in highly liquid, highly rated instruments which are uninsured. The Company may also have corporate deposit balances with financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $250,000. The Company has not experienced losses on these accounts and does not believe it is exposed to any significant credit risk with respect to these accounts.
Funds held at venues
Restricted cash and cash equivalents
The Company has restricted cash deposits and interest-bearing highly liquid investments held at financial institutions related to operational reserves. Restricted cash and cash equivalents also includes payment stablecoins pledged as collateral where the Company retains control of the payment stablecoins. These payment stablecoins are contractually restricted and not available for general corporate use until the related borrowings are repaid.
Crypto assets held for operations
The Company may receive crypto assets as a form of payment for transaction revenue, blockchain rewards, and other subscriptions and services revenue, which are recorded in Crypto assets held for operations in the Consolidated Balance Sheets when received. Crypto assets received as a form of
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Coinbase Global, Inc.
Notes to Consolidated Financial Statements
Accounts receivable and allowance for doubtful accounts
Accounts receivable are contractual rights to receive cash or crypto assets and consist of stablecoin revenue receivable, customer accounts receivable, and other receivables.
Stablecoin revenue receivable represents the Company’s portion of income earned and receivable on payment stablecoin reserves through its arrangements with the issuers of these stablecoins.
Customer accounts receivable primarily comprises receivables from custodial fee revenue and other transaction fee and subscription and services revenue.
Receivables are recorded at the transaction price when the Company’s performance obligations are satisfied, either at a point in time or over time (typically monthly). Accounts receivable denominated in crypto assets represent rights to receive a fixed amount of crypto assets at the time of invoicing and are initially and subsequently measured at the fair value of the underlying crypto assets to be received, with changes in the fair value recorded in Other operating expense, net in the Consolidated Statements of Operations.
Crypto assets held for investment
Crypto assets held for investment are primarily held long term. The Company does not engage in regular trading of these assets but may lend them or stake them. When crypto assets that were loaned are returned, they continue to be held for investment. See Note 5. Collateralized Arrangements and Financing for details on institutional financing activities.
Crypto assets held for investment are initially recorded at cost and are subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in Losses (gains) on crypto assets held for investment, net in the Consolidated Statements of Operations. Realized gains and losses on disposition are recognized on a specific identification basis. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement.
Crypto assets held for investment that are loaned are derecognized and related crypto asset loan receivables are recognized for the period that the loan is outstanding. See discussion of accounting for crypto asset loan receivables under —Lending and related collateral above.
Crypto assets held for investment that are staked remain recorded within Crypto assets held for investment in the Consolidated Balance Sheets. Staking rewards earned by the Company through staking of these assets are recognized as an addition to Crypto assets held for investment and in Other income, net in the Consolidated Statements of Operations in the period received.
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Notes to Consolidated Financial Statements
Software and equipment, net
Software and equipment, net is stated at cost less associated accumulated depreciation and amortization, and consists mainly of capitalized internally developed software. Depreciation and amortization is computed using the straight-line method over the lesser of the estimated useful life of the asset or the remaining lease term, as applicable. The estimated useful lives of capitalized internally developed software is three years . The remaining balance of software and equipment consists of furniture and fixtures, computer equipment, and leasehold improvements, for which the useful lives generally range from to 10 years.
Business combinations, goodwill, and acquired intangible assets
The Company accounts for business combinations using the acquisition method. Purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated acquisition-date fair values, with any excess consideration recognized as goodwill. The results of acquired businesses are included in the Consolidated Financial Statements from the date of the acquisition. Acquisition-related costs are expensed as incurred in General and administrative expenses within the Consolidated Statements of Operations.
Estimates of fair value are subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill, if new information is obtained about facts and circumstances that existed at the acquisition date. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations.
Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually on October 1, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Goodwill is tested at the reporting unit level. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized for the amount of the excess, limited to the total amount of goodwill allocated to that reporting unit.
Acquired intangible assets with a definite useful life are amortized over their estimated useful lives on a straight-line basis. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Amortization of acquired developed technology is recorded under Technology and development expense and amortization of other acquired intangible assets is recorded under General and administrative expense in the Consolidated Statements of Operations.
Long-term debt and interest expense
Long-term debt is carried at amortized cost. The Company accounts for the 2026, 2029, 2030, and 2032 Convertible Notes wholly as debt because (1) the conversion features do not require bifurcation as a
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derivative under ASC 815, Derivatives and Hedging (“ASC 815”), and (2) these convertible notes were not issued at a substantial discount.
Coupon interest on the Company’s long-term debt comprises the majority of Interest expense in the Consolidated Statements of Operations. Debt discounts and debt issuance costs are also amortized to Interest expense in the Consolidated Statements of Operations using the effective interest method over the contractual term of the respective note.
Capped calls entered into in connection with the Company’s long-term debt meet the criteria for classification in equity, are not remeasured each reporting period, and are included as a reduction to Additional paid-in capital within Total shareholders’ equity in the Consolidated Balance Sheets.
Customer custodial funds and Customer custodial fund liabilities
Customer custodial funds represent restricted cash and cash equivalents maintained in segregated accounts of the Company at financial institutions and asset managers that are held for the exclusive benefit of customers and deposits in transit from payment processors and financial institutions. Customer custodial fund liabilities represent the obligation to return cash deposits held by customers in their fiat wallets and unsettled fiat deposits and withdrawals. Deposits in transit represent settlements from third-party payment processors and banks for customer transactions. Deposits in transit are typically received within five business days of the transaction date. The Company establishes withdrawal-based limits in order to mitigate potential losses by preventing customers from withdrawing the associated crypto asset to an external blockchain address until the deposit settles. In certain jurisdictions, deposits in transit qualify as eligible liquid assets to meet regulatory requirements to fulfill the Company’s direct obligations under customer custodial fund liabilities. In these cases, the Company restricts the use of these assets and classifies them as current based on their purpose and availability to fulfill the Company’s direct obligation under Customer custodial fund liabilities in the Consolidated Balance Sheets.
Certain jurisdictions where the Company operates require the Company to hold eligible liquid assets, as defined by applicable regulatory requirements and commercial law in these jurisdictions, equal to at least 100% of the aggregate amount of all applicable customer custodial fund liabilities. Depending on the jurisdiction, eligible liquid assets can include cash and cash equivalents, customer custodial funds, and in-transit customer receivables. As of December 31, 2025 and 2024, the Company’s eligible liquid assets were greater than the aggregate amount of Customer custodial fund liabilities.
Leases
The Company determines if an arrangement is a lease at inception. The Company’s leases are primarily operating leases for corporate offices. Operating lease right-of-use (“ROU”) assets are included in Other non-current assets, and current and non-current lease liabilities are included in Accrued expenses and other current liabilities and Other non-current liabilities, respectively, in the Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of future minimum lease payments over the lease term. Operating lease ROU assets also include any lease payments made before commencement and exclude lease incentives. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement to determine the present value of
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future payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.
Lease expense is recognized on a straight-line basis over the lease term. The Company has made the policy election to account for short-term leases by recognizing the lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term and not recognizing these leases in the Consolidated Balance Sheets. The Company has real estate lease agreements with lease and non-lease components for which the Company has made the accounting policy election to account for these agreements as a single lease component.
Derivative contracts
The Company enters into arrangements that result in obtaining the right to receive or obligation to deliver a fixed amount of crypto assets in the future. These are hybrid instruments, consisting of a receivable or debt host contract that is initially measured at the fair value of the underlying crypto assets and is subsequently carried at amortized cost, and an embedded forward feature based on the changes in the fair value of the underlying crypto asset. The embedded forward is bifurcated from the host contract, and is subsequently measured at fair value.
These derivative contracts derive their value from underlying asset prices, other inputs, or a combination of these factors. Derivative contracts are recognized as either assets or liabilities in the Consolidated Balance Sheets at fair value, with changes in fair value recognized in Transaction expense, Other operating expense, net, or Other income, net in the Consolidated Statements of Operations, depending on the nature of the derivative. Cash flows from derivative contracts are recognized as investing activities and adjustments to reconcile Net income to Net cash provided by operating activities in the Consolidated Statements of Cash Flows, depending on the nature of the derivative.
Investments
The Company holds marketable securities and strategic investments, which are recorded within Marketable investments and Strategic investments in the Consolidated Balance Sheets.
Marketable investments primarily include equity securities and are measured and recorded at fair value on a recurring basis. These investments are available for trading subject to any associated lock up.
The Company’s strategic investments primarily include equity investments in privately held companies without readily determinable fair values where the Company (1) holds less than 20% ownership in the entity and (2) does not exercise significant influence. These investments are recorded at cost and adjusted for: (i) observable transactions for same or similar investments of the same issuer (referred to as the measurement alternative) or (ii) impairment.
Marketable and strategic investments activities are recorded in Other income, net in the Consolidated Statements of Operations.
Fair value measurements
The Company measures certain assets and liabilities at fair value. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
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•Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3: Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
Transaction expense
Transaction expense includes certain costs incurred to operate the Company’s platform, process crypto asset trades, and perform wallet services, and are directly associated with generating revenue. Primary components include blockchain rewards distributed to customers for their participation in blockchain activities such as staking, account verification fees, fees paid to payment processors and other financial institutions for customer transaction activity, blockchain network fees, transaction rebates, and crypto asset losses from transaction reversals. Transaction expense also includes gains and losses from the fair value remeasurement of crypto asset borrowings, obligations to return crypto asset collateral, crypto assets borrowed, crypto assets held as collateral, and crypto asset loan receivables originated with borrowed assets. These items are offsetting by nature and generally net to an immaterial amount. Transaction-level costs are expensed as incurred, while fixed-fee costs are expensed over the contract term. The Company has elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less.
Sales and marketing
The Company defines its selling expenses in accordance with ASC 220 as Sales and marketing expenses as presented in the Consolidated Statements of Operations. These expenses primarily comprise employee-related expenses, marketing programs, USDC rewards, and customer acquisition expenses. Employee-related costs include employee cash, stock-based compensation, and other employee benefits. Marketing programs costs primarily represent third-party advertising expenses. Employee-related advertising costs are immaterial for all periods presented.
Stock-based compensation
Stock plans
The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”) the 2021 Employee Stock Purchase Plan (the “ESPP”), and two legacy plans: the Amended and Restated 2013 Stock Plan and the 2019 Equity Incentive Plan (collectively, the “Prior Plans”). Following the direct listing in 2021, all new equity awards are granted under the 2021 Plan and ESPP. Additionally, certain awards assumed in connection with acquisitions are governed by their respective original plans.
Evergreen provisions
The 2021 Plan and ESPP provide for automatic annual increases in the number of shares available for issuance on January 1 of each year for 10 5 % (for the 2021 Plan) and 1 % (for the ESPP) of the total outstanding shares of common stock on the preceding December 31, or a lesser amount determined by the Board.
Awards and vesting
The Company primarily grants restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). The Company previously granted stock options under Prior Plans, which remain outstanding.
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RSUs generally vest over a service period ranging from to four years . Performance RSUs (“PRSUs”) vest upon the achievement of specified financial or market-based thresholds. RSAs issued in acquisitions generally vest over three years and are subject to repurchase at par value upon forfeiture.
Stock options outstanding have a contractual term of 10 years. Options under Prior Plans generally vest over four years (25 % cliff followed by monthly vesting) and allow for a seven-year post-termination exercise window for certain employees. Outstanding options under the 2021 Plan generally vest quarterly over three years with a three-month post-termination exercise window. Outstanding options also include performance stock options granted to the Chief Executive Officer that vest upon the achievement of specific market conditions, subject to continued service.
Valuation and expense recognition
The Company accounts for stock-based compensation by measuring the fair value of awards at the grant date. For service-based awards, expense is recognized on a straight-line basis over the requisite service period. Forfeitures are recognized as they occur.
The fair value of RSUs is based on the closing market price of the Company’s Class A common stock on the grant date.
For stock options granted in prior periods, fair value was estimated using the Black-Scholes-Merton model. Key assumptions included the expected term (based on historical exercise behavior and contractual terms), historical volatility of the Company’s Class A common stock, risk-free rates based on U.S. Treasury yields, and a zero dividend yield.
Market-based awards, which are performance stock options and PRSUs, are valued using a Monte Carlo simulation. Expense is recognized using the accelerated attribution method and is not reversed if the market condition is not met, provided the requisite service is rendered.
PRSUs subject to financial performance conditions are valued based on the price of the Company’s Class A common stock on the grant date. Expense is recognized when achievement of the condition becomes probable, evaluated at each reporting date, with cumulative adjustments recorded in the period of change.
Income taxes
The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when management estimates that it is more likely than not that deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future pre-tax earnings, the reversal of temporary differences between book and tax income, and the expected tax rates in future periods.
The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are more likely than not of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized. It is the Company’s practice to recognize interest and penalties related to income tax matters in income tax expense.
For U.S. federal tax purposes, crypto asset transactions are treated under the same tax principles as property transactions. The Company recognizes a gain or loss when crypto assets are exchanged for other property, in the amount of the difference between the fair market value of the property received and
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the tax basis of the exchanged crypto assets. Receipts of crypto assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.
Net income (loss) per share
The Company computes net income (loss) per share using the two-class method required for participating securities. The two-class method requires income available to common shareholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Certain shares of the Company’s restricted stock granted as consideration in past acquisitions are deemed participating securities. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses.
Basic net income (loss) per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted net income (loss) per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options and warrants, vesting of RSUs and restricted stock, conversion of the Company’s convertible notes, and settlement of contingent consideration.
Foreign currency transactions
The Company’s functional currency is the U.S. dollar. The Company has exposure to foreign currency translation gains and losses arising from the Company’s net investment in foreign subsidiaries. The revenues, expenses, and financial results of these foreign subsidiaries are recorded in their respective functional currencies. The financial statements of these subsidiaries are translated into U.S. dollars using a current rate of exchange, with gains or losses, net of tax as applicable, included in Accumulated other comprehensive income (loss) (“AOCI”) within the Consolidated Statements of Changes in Shareholders’ Equity. Cumulative translation adjustments are released from AOCI and recorded in the Consolidated Statements of Operations when the Company disposes or loses control of a consolidated subsidiary. Gains and losses resulting from remeasurement are recorded in Other income, net within the Consolidated Statements of Operations.
Realized gains and losses on changes in foreign currency exchange rates resulting from settlement of the Company’s foreign currency-denominated assets and liabilities and unrealized gains and losses resulting from remeasurement of transactions and monetary assets and liabilities denominated in non-functional currencies are recognized as a component of Other income, net in the Consolidated Statements of Operations.
3. ACQUISITIONS
Information on acquisitions completed during the periods presented is set forth below. The results of operations of all business combinations have been recorded in the Consolidated Financial Statements since the dates of acquisition.
Deribit
On August 14, 2025, the Company acquired the outstanding equity of Sentillia B.V. (“Deribit”), a crypto derivatives exchange. The Company believes this strategic acquisition will play a key role in its goal to be the premier global platform for crypto derivatives. Total consideration transferred in the
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acquisition, subject to customary post-closing adjustments, was $4.3 billion, consisting of the following (in thousands):
| Cash | $ | ||||
Class A common stock of the Company(1) | |||||
| Total purchase consideration | $ | ||||
__________________
The aggregate purchase consideration includes $150.0 million in cash subject to an indemnity escrow that expires 15 months after the acquisition date.
In accordance with ASC 805, Business Combinations (“ASC 805”), the acquisition was accounted for as a business combination under the acquisition method. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date with the excess recorded as goodwill, as follows (in thousands):
| Goodwill | $ | ||||
| Intangible assets | |||||
| Crypto assets held for investment | |||||
| Deferred tax assets and liabilities, net | ( | ||||
Cash and cash equivalents and restricted cash | |||||
| Other assets and liabilities, net | ( | ||||
| Net assets acquired | $ | ||||
The goodwill is primarily attributed to the assembled workforce as well as the anticipated operational synergies from the integration of Deribit’s trading platform with the Company’s existing platform. The goodwill is expected to be deductible for U.S. tax purposes.
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for years data):
| Fair Value | Useful Life at Acquisition (in years) | ||||||||||
| Customer relationships | $ | ||||||||||
| Acquired developed technology | |||||||||||
| Trade name | |||||||||||
| Total identifiable intangible assets acquired | $ | ||||||||||
The customer relationships represent the fair value of projected cash flows derived from existing customers of Deribit and were valued using the multi-period excess earnings method. The present value of projected cash flows included significant judgment and assumptions regarding future revenues, attrition rates, and the discount rate.
Echo
On October 8, 2025, the Company acquired all of the outstanding equity interests of Gm Echo Ltd (“Echo”), an onchain capital raising platform. The Company believes this strategic acquisition will play a key role in its goal to create more accessible, efficient, and transparent capital markets.
In accordance with ASC 805, the acquisition was accounted for as a business combination under the acquisition method. The total purchase consideration transferred in the acquisition was $176.0 million, which included $68.0 million in cash and $108.0 million in Class A common stock of the Company. Net assets acquired were $23.7 million, and the excess purchase price of $152.3 million was recorded as
goodwill. The goodwill is primarily attributed to the assembled workforce as well as the anticipated operational synergies from the integration of Echo’s platform with the Company’s existing platform. The goodwill is expected to be deductible for U.S. tax purposes.
Other acquisitions
4. REVENUE
The following table presents revenue disaggregated by type (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net revenue | ||||||||||||||||||||
| Transaction revenue | ||||||||||||||||||||
| Consumer, net | $ | $ | $ | |||||||||||||||||
| Institutional, net | ||||||||||||||||||||
| Other transaction revenue, net | ||||||||||||||||||||
| Total transaction revenue | ||||||||||||||||||||
| Subscription and services revenue | ||||||||||||||||||||
Stablecoin revenue(1) | ||||||||||||||||||||
| Blockchain rewards | ||||||||||||||||||||
Interest and finance fee income(2) | ||||||||||||||||||||
| Other subscription and services revenue | ||||||||||||||||||||
| Total subscription and services revenue | ||||||||||||||||||||
| Total net revenue | ||||||||||||||||||||
| Other revenue | ||||||||||||||||||||
Corporate interest and other income(1) | ||||||||||||||||||||
| Total other revenue | ||||||||||||||||||||
| Total revenue | $ | $ | $ | |||||||||||||||||
__________________
(1)Amounts represent revenue that is not accounted for as revenue from contracts with customers, as defined in ASC 606.
(2)Amounts primarily represent revenue that is not accounted for as revenue from contracts with customers, as well as an immaterial amount of finance fee income that is accounted for as revenue from contracts with customers.
During the years ended December 31, 2025, 2024, and 2023, one counterparty accounted for 19 %, 14 %, and 22 %, respectively, of total revenue.
Revenue by geographic location
The following table presents revenue disaggregated by geography based on domiciles of the customer or other counterparty (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
U.S.(1) | $ | $ | $ | ||||||||||||||
International(2) | |||||||||||||||||
| Total revenue | $ | $ | $ | ||||||||||||||
__________________
(1)Nearly all revenue that is not accounted for as revenue from contracts with customers, as defined in ASC 606, is with counterparties in the U.S.
(2)No country accounted for more than 10% of Total revenue.
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Notes to Consolidated Financial Statements
5. COLLATERALIZED ARRANGEMENTS AND FINANCING
Lending and related collateral
The following table summarizes the Company’s institutional financing lending arrangements (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Fiat and payment stablecoin loan receivables | $ | $ | ||||||||||||
| Crypto asset loan receivables | ||||||||||||||
Total loan receivables(1) | $ | $ | ||||||||||||
__________________
(1)Includes an immaterial amount of fiat and crypto asset trade finance receivables as of December 31, 2025 and 2024.
As of December 31, 2025 and 2024, the Company had four and three counterparties, respectively, each of whom accounted for more than 10
As of December 31, 2025 and 2024, the collateral requirements for all loans outstanding ranged from 100 300
The following table summarizes assets the Company holds and has recognized as collateral with a corresponding obligation to return the collateral to the borrower (in thousands, except units):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | |||||||||||||||||||||||||||||||||
Fiat and payment stablecoins(1) | N/A | N/A | $ | N/A | N/A | $ | ||||||||||||||||||||||||||||||||
| Bitcoin | $ | $ | ||||||||||||||||||||||||||||||||||||
| Ethereum | ||||||||||||||||||||||||||||||||||||||
Other crypto assets(2) | nm | |||||||||||||||||||||||||||||||||||||
Crypto assets held as collateral | $ | $ | ||||||||||||||||||||||||||||||||||||
Total recognized held as collateral | $ | $ | ||||||||||||||||||||||||||||||||||||
nm - not meaningful
(1)Fiat and payment stablecoin collateral held are recognized within Cash and cash equivalents in the Consolidated Balance Sheets. Cost basis and units are not required disclosure and are therefore labeled N/A.
(2)Includes various other crypto asset balances, none of which individually represented more than 5% of the fair value of total Crypto assets held as collateral.
The following table provides a reconciliation of Crypto assets held as collateral (in thousands):
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Collateral received | ||||||||||||||
| Collateral returned | ( | ( | ||||||||||||
| Gains | ||||||||||||||
| Losses | ( | ( | ||||||||||||
| Ending balance | $ | $ | ||||||||||||
No cumulative realized gains or losses occurred during the period presented as no Crypto assets held as collateral were sold or rehypothecated.
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The following table summarizes collateral pledged by customers in financing arrangements with the Company, which the Company has not recognized as collateral nor as an obligation to return the collateral (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Fiat and payment stablecoins | $ | $ | ||||||||||||
| Crypto assets | ||||||||||||||
Total customer collateral not recognized as collateral | $ | $ | ||||||||||||
Borrowings and related collateral
The following table summarizes the units, cost basis, and fair value of Crypto assets borrowed (in thousands, except units):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | |||||||||||||||||||||||||||||||||
| Bitcoin | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Ethereum | ||||||||||||||||||||||||||||||||||||||
Other crypto assets(1) | nm | nm | ||||||||||||||||||||||||||||||||||||
| Total borrowed | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
__________________
nm - not meaningful
(1)Includes various other crypto asset balances, none of which individually represented more than 5% of the fair value of total Crypto assets borrowed.
The following table provides a reconciliation of Crypto assets borrowed (in thousands):
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Borrowing activity: | ||||||||||||||
| Borrowings | ||||||||||||||
| Repayment of borrowings | ( | ( | ||||||||||||
| Lending activity: | ||||||||||||||
Origination of loan receivables(1) | ( | ( | ||||||||||||
Customer repayment of loan receivables(1) | ||||||||||||||
| Gains | ||||||||||||||
| Losses | ( | ( | ||||||||||||
| Ending balance | $ | $ | ||||||||||||
(1)Represents loans originated from borrowed assets. See Note 8. Crypto Assets Held for Investment for loans originated from assets held for investment.
No cumulative realized gains or losses occurred during the periods presented as no Crypto assets borrowed were sold.
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Notes to Consolidated Financial Statements
The following table summarizes the units, cost basis, and fair value of Short-term borrowings (in thousands, except units):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | |||||||||||||||||||||||||||||||||
| Payment stablecoins | N/A | N/A | $ | N/A | N/A | $ | ||||||||||||||||||||||||||||||||
| Bitcoin | $ | $ | ||||||||||||||||||||||||||||||||||||
| Ethereum | ||||||||||||||||||||||||||||||||||||||
Other crypto assets(1) | nm | nm | ||||||||||||||||||||||||||||||||||||
Total crypto asset borrowings | $ | $ | ||||||||||||||||||||||||||||||||||||
Total short-term borrowings | $ | $ | ||||||||||||||||||||||||||||||||||||
__________________
nm - not meaningful
(1)Includes various other crypto asset balances, none of which individually represented more than 5% of the fair value of total crypto asset borrowings.
As of December 31, 2025 and 2024, the weighted average annual fees on Short-term borrowings were 3.5 % and 2.7 %, respectively.
The fair value of the Company’s corporate assets pledged as collateral against Short-term borrowings are recorded in Restricted cash and cash equivalents and consisted of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Payment stablecoins | $ | $ | |||||||||
6. CRYPTO ASSETS HELD FOR OPERATIONS
The following table summarizes Crypto assets held for operations (in thousands, except units):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | ||||||||||||||||||||||||||||||
| Bitcoin | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Ethereum | |||||||||||||||||||||||||||||||||||
| Solana | |||||||||||||||||||||||||||||||||||
Other crypto assets(1) | nm | nm | |||||||||||||||||||||||||||||||||
| Total held for operations | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
nm - not meaningful
(1)Includes various other crypto asset balances, none of which individually represented more than 5% of the fair value of total Crypto assets held for operations.
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7. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Stablecoin revenue receivable | $ | $ | ||||||||||||
| Customer accounts receivable | ||||||||||||||
| Other accounts receivable | ||||||||||||||
| Gross accounts receivable | ||||||||||||||
| Less: allowance for doubtful accounts | ( | ( | ||||||||||||
| Total accounts receivable, net | $ | $ | ||||||||||||
As of December 31, 2025 and 2024, the Company had two and one counterparties, respectively, each of whom accounted for more than 10
8. CRYPTO ASSETS HELD FOR INVESTMENT
The following table summarizes Crypto assets held for investment (in thousands, except units):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Units | Cost Basis | Fair Value | Units | Cost Basis | Fair Value | ||||||||||||||||||||||||||||||
| Bitcoin | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Ethereum | |||||||||||||||||||||||||||||||||||
Other crypto assets(1) | nm | nm | |||||||||||||||||||||||||||||||||
| Total held for investment | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
nm - not meaningful
(1)Includes various other crypto asset balances, none of which individually represented more than 5% of the fair value of total Crypto assets held for investment.
The following table provides a reconciliation of Crypto assets held for investment (in thousands):
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Cumulative-effect adjustment upon adoption of ASU 2023-08 | — | |||||||||||||
Additions(1) | ||||||||||||||
| Dispositions | ( | ( | ||||||||||||
| Lending activity: | ||||||||||||||
Origination of loan receivables(2) | ( | ( | ||||||||||||
Customer repayment of loan receivables(2) | ||||||||||||||
Gains(3) | ||||||||||||||
Losses(3) | ( | ( | ||||||||||||
| Ending balance | $ | $ | ||||||||||||
(1)Additions represent purchases of, and staking rewards earned on, Crypto assets held for investment.
(2)Represents loans originated from Crypto assets held for investment. See Note 5. Collateralized Arrangements and Financing for loans originated from borrowed assets.
(3)The Company measures gains and losses by each asset held. These amounts include cumulative realized gains of $75.2 million and $153.4 million, and unrealized losses of $604.0 million and gains of $533.7 million, during the years ended December 31, 2025 and 2024, respectively.
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9. SOFTWARE AND EQUIPMENT, NET
Software and equipment, net consisted of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Capitalized internally developed software | $ | $ | |||||||||
Other(1) | |||||||||||
Total software and equipment, gross | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
Total software and equipment, net | $ | $ | |||||||||
_______________
Total additions to capitalized internally developed software were $138.3 million, $110.5 million, and $112.0 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Goodwill
The following table reflects the changes in the carrying amount of goodwill (in thousands):
| Carrying Amount | |||||
| Balance at January 1, 2025 | $ | ||||
| Additions due to acquisitions | |||||
| Balance at December 31, 2025 | $ | ||||
There was no impairment recognized against goodwill at the beginning or end of the year presented, and no measurement period adjustments during the year presented.
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Intangible assets, net
Intangible assets, net, as disclosed in this footnote, exclude internally developed software and crypto assets, which are presented within Software and equipment, net and the various crypto assets held line items in the Consolidated Balance Sheets, respectively. Intangible assets, net and their associated weighted average remaining useful lives in years (“Life”) consisted of the following (in thousands, except years):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | Life | |||||||||||||||||||||||||||||||||||||||||||
| Amortizing assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Acquired developed technology | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Trade name and other | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Indefinite-lived assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Licenses and other | — | N/A | — | N/A | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
The effects of amortization of Intangible assets, net on the Consolidated Statements of Operations was as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Technology and development | $ | $ | $ | |||||||||||||||||
| Sales and marketing | ||||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Total amortization expense | $ | $ | $ | |||||||||||||||||
There were no material impairment charges associated with these assets during these periods. The Company estimates no significant residual value related to these amortizing intangible assets.
The expected future amortization expense for amortizing intangible assets as of December 31, 2025, was as follows (in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total expected future amortization expense | $ | ||||
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11. LONG-TERM DEBT
The components of Long-term debt, including the current portion due June 1, 2026, were as follows (in thousands, except percentages):
| Effective Interest Rate | Principal Amount | Unamortized Debt Discount and Issuance Costs | Net Carrying Amount | Fair Value(1) | ||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
Convertible senior notes
2026 Convertible Notes
In May 2021, the Company issued an aggregate principal amount of $1.4 billion of 0.5 % convertible senior notes due in 2026 (the “2026 Convertible Notes”) in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The 2026 Convertible Notes are senior unsecured obligations of the Company maturing on June 1, 2026, unless earlier converted, redeemed or repurchased. The 2026 Convertible Notes bear interest at a rate of 0.5 % per year, payable semi-annually in arrears on June 1 and December 1.
The 2026 Convertible Notes are convertible at the option of the holders from and after December 1, 2025, at any time at their election until the close of business on the second scheduled trading day immediately preceding June 1, 2026. The Company may satisfy conversions in cash, shares of the Company’s Class A common stock, or a combination, based on the applicable conversion rate. The initial conversion rate is 2.6994 shares of the Company’s Class A common stock per $1,000 principal amount of 2026 Convertible Notes (approximately $370.45 per share), subject to adjustment as set forth in the indenture governing the 2026 Convertible Notes. In the event of a make-whole fundamental change, the conversion rate will, in certain circumstances, be increased for a specified period of time. In the event of a fundamental change, holders may require the Company to repurchase their 2026 Convertible Notes at a repurchase price equal to 100 % of the principal amount of the 2026 Convertible Notes being repurchased, plus accrued and unpaid interest.
In 2023, the Company paid $126.4 million to repurchase $164.5 million of aggregate principal amount of the 2026 Convertible Notes with a carrying value of $162.4 million, net of immaterial unamortized issuance costs, original issue discount, and legal fees. The Company recorded a corresponding net gain
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on extinguishment of long-term debt during the year ended December 31, 2023 of $35.8 million in Other income, net within the Consolidated Statements of Operations.
2029 Convertible Notes
In August 2025, the Company issued an aggregate principal amount of $1.5 billion of 0 % convertible senior notes due 2029 (the “2029 Convertible Notes”) in a private offering pursuant to Rule 144A under the Securities Act. This issuance included the full exercise by the initial purchasers of their option to purchase an additional $200.0 million aggregate principal amount of the 2029 Convertible Notes, pursuant to an indenture, dated August 8, 2025 between the Company and U.S. Bank Trust Company, National Association, as trustee (the “2029 Indenture”).
The 2029 Convertible Notes do not bear regular interest or accrete principal and mature on October 1, 2029, unless converted or repurchased earlier. The Company may pay special interest on the 2029 Convertible Notes under certain circumstances in accordance with the terms of the 2029 Indenture.
The 2029 Convertible Notes are not redeemable before maturity. Holders may convert the 2029 Convertible Notes at any time before the close of business on the business day immediately preceding July 2, 2029, only if specific price or event conditions are met or certain corporate events occur, or at any time from, and including, July 2, 2029, until the close of business on the second trading day immediately prior to the maturity date. The Company may satisfy conversions in cash, Class A common stock, or a combination, at an initial rate of 2.2005 shares per $1,000 (approximately $454.44 per share). The conversion rate and conversion price are subject to adjustments as set forth in the indenture governing the 2029 Convertible Notes. The Company classifies the 2029 Convertible Notes wholly as long-term debt, as the conversion features do not require separate accounting.
2030 Convertible Notes
In March 2024, the Company issued an aggregate principal amount of $1.3 billion of convertible senior notes due 2030 (the “2030 Convertible Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The issuance included the full exercise by the initial purchasers of their option to purchase up to an additional $165 million aggregate principal amount of the 2030 Convertible Notes, pursuant to an indenture, dated March 18, 2024 between the Company and U.S. Bank Trust Company, National Association, as trustee (the “2030 Convertible Notes Indenture”). The 2030 Convertible Notes bear interest at a rate of 0.25 % per year, payable semi-annually in arrears on April 1 and October 1.
The 2030 Convertible Notes are senior unsecured obligations of the Company maturing on April 1, 2030, unless earlier repurchased, redeemed or converted. The proceeds received of $1.2 billion, were net of a 1.5 % original issue discount and immaterial debt issuance costs.
Beginning with the third quarter of 2024, the 2030 Convertible Notes are convertible at the option of the holder if the last reported sale price per share of Class A common stock exceeds 130 % of the conversion price for each of at least 20 trading days, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. The initial conversion rate is 2.9981 shares of the Company’s Class A common stock per $1,000 principal amount of notes (approximately $333.54 per share). The conversion rate and conversion price are subject to adjustments as set forth in the indenture governing the 2030 Convertible Notes. Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of the Company’s Class A common stock, or a combination, at the Company’s election, based on the applicable conversion rate. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the 2030 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. Additionally in the event of a corporate event constituting a fundamental change (as defined in the 2030 Convertible Notes Indenture), holders of the 2030 Convertible Notes may require the Company to repurchase all or a portion of their 2030 Convertible Notes at a repurchase price equal to 100 % of the principal amount of the 2030 Convertible Notes being
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repurchased, plus accrued and unpaid special interest or additional interest, if any, to, but excluding, the date of the fundamental change repurchase.
The Company accounts for the 2030 Convertible Notes wholly as debt because (1) the conversion features do not require bifurcation as a derivative under ASC 815, Derivatives and Hedging and (2) the 2030 Convertible Notes were not issued at a substantial premium.
2032 Convertible Notes
In August 2025, concurrently with the issuance of the 2029 Convertible Notes, the Company issued an aggregate principal amount of $1.5 billion of 0 % convertible senior notes due 2032 (the “2032 Convertible Notes”) in a private offering pursuant to Rule 144A under the Securities Act. The issuance included the full exercise by the initial purchasers of their option to purchase an additional $200.0 million aggregate principal amount of the 2032 Convertible Notes, pursuant to an indenture, dated August 8, 2025 between the Company and U.S. Bank Trust Company, National Association, as trustee (the “2032 Indenture”).
The 2032 Convertible Notes do not bear regular interest or accrete principal and mature on October 1, 2032, unless converted, repurchased, or redeemed earlier. The Company may pay special interest on the 2032 Convertible Notes under certain circumstances in accordance with the terms of the 2032 Indenture.
Holders can convert the 2032 Convertible Notes at any time before the close of business on the business day immediately preceding July 1, 2032, only if specific price or trading conditions are met, certain corporate events occur, or if the notes are called for redemption. From and including July 1, 2032, holders may convert the 2032 Convertible Notes at any time until the close of business on the second trading day immediately prior to the maturity date. The Company may satisfy conversions in cash, Class A common stock, or a combination, at an initial rate of 2.5327 shares per $1,000 (approximately $394.84 per share). The conversion rate and conversion price are subject to adjustments as set forth in the indenture governing the 2032 Convertible Notes.
Subject to certain limitations, the Company may redeem the 2032 Convertible Notes on or after October 1, 2029, and on or before the 20th scheduled trading day immediately before the maturity date, if the price of the Company’s Class A common stock exceeds 130 % of the conversion price for a set period. The 2032 Convertible Notes are wholly classified as long-term debt, as the conversion features do not require separate accounting.
Supplemental indentures
In connection with the Company’s Reincorporation, on December 12, 2025, the Company and U.S. Bank Trust Company, National Association, as trustee, entered into first supplemental indentures to each the 2026 Convertible Notes indenture, 2029 Indenture, 2030 Convertible Notes indenture, and 2032 Indenture to reflect ministerial changes in connection with to the Reincorporation. The Reincorporation did not result in any adjustment to the respective conversion rates or trigger any repurchase rights of the holders.
Capped calls
On May 18, 2021, in connection with the pricing of the 2026 Convertible Notes, on March 13, 2024, in connection with the pricing of the 2030 Convertible Notes, and on March 14, 2024, in connection with the full exercise by the initial purchasers of their option to purchase additional 2030 Convertible Notes, the Company entered into privately negotiated capped call transactions (the “2026 Capped Calls” and “2030 Capped Calls,” respectively, and “the Capped Calls,” collectively) with certain financial institutions (the “2026 Option Counterparties” and “2030 Option Counterparties,” respectively, and the “Option Counterparties” collectively) at a cost of $90.1 million and $104.1 million, respectively, in each case in exchange for the right to receive a predetermined amount of cash, shares of the Company’s Class A
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common stock, or a combination thereof, at the Company’s election. The Capped Calls cover, subject to customary adjustments, the number of shares of the Company’s Class A common stock initially underlying each of the 2026 Convertible Notes and 2030 Convertible Notes (collectively, the “Convertible Notes”), as applicable. The Capped Calls allow the Company to hedge the economic effect of the conversion options embedded in the Convertible Notes and purchase shares of its own Class A common stock at a specified strike price. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its Class A common stock (or, in the event a conversion of the Convertible Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the Convertible Notes its Class A common stock price exceeds the conversion price of the Convertible Notes. The 2026 Capped Calls have an initial strike price of approximately $370.45 per share of Class A common stock (the “2026 Initial Strike Price”) and an initial cap price of approximately $478.00 per share of Class A common stock (the “2026 Initial Cap Price”). The 2030 Capped Calls have an initial strike price of approximately $333.54 per share of Class A common stock (the “2030 Initial Strike Price”) and an initial cap price of approximately $503.46 per share of Class A common stock (the “2030 Initial Cap Price”). Upon expiration of the agreements underlying the Capped Calls, the Capped Calls will be automatically exercised. If the closing market price of the Class A common stock is above the applicable initial cap price, the initial investments will be returned with a premium in either cash or shares at the Company’s election. If the closing market price of the Class A common stock is at or below the applicable initial strike price, the Company will receive the number of shares specified in the agreements.
Upon certain extraordinary events, nationalization, insolvency or delisting event, or additional disruption events, the Capped Calls are contractually structured to terminate. The Company has the contractual right to terminate the Capped Calls upon repurchase, redemption, or conversion (in the case of conversion, prior to December 1, 2025 or October 1, 2029, for the 2026 Capped Calls and 2030 Capped Calls, respectively) of the underlying Convertible Notes, in certain circumstances.
The Capped Calls also include early termination provisions based on beneficial ownership positions of the counterparties. That is, if at any time the counterparty’s holdings exceed 8% beneficial ownership of the Company (as defined under Section 13 of the Exchange Act) and the counterparty is unable, after commercially reasonable efforts, to effect a transfer or assignment of all or a portion of the transaction such that an excess ownership position no longer exists, the counterparty may early terminate a portion of the Capped Calls, in which case the Company can settle in cash or shares of its Class A common stock.
On August 5 and 6, 2025, the Company entered into privately negotiated capped call transactions with certain financial institutions relating to the 2029 Convertible Notes and 2032 Convertible Notes (the “Notes”), at a cost of $86.1 million and $138.1 million, respectively. These capped calls cover, subject to certain customary adjustments, the shares underlying the Notes and have initial strike prices of $454.44 (2029 Convertible Notes) and $394.84 (2032 Convertible Notes) per share, with an initial cap price of $595.98 per share. The capped calls allow the Company to hedge the economic effect of the conversion options embedded in the Notes and purchase shares of its own Class A common stock at a specified strike price, reducing dilution or offsetting excess cash payments if the stock price exceeds the strike price but does not exceed the cap price. The Capped Calls are separate transactions, and not part of the terms of any series of Notes. The agreements may be adjusted or terminated if extraordinary events like mergers, insolvency, or delisting occur, and are separate from the Notes, providing no rights to holders of the Notes.
Senior notes
In September 2021, the Company completed the issuance of an aggregate principal amount of $1.0 billion of senior notes due on October 1, 2028 (the “2028 Senior Notes”) and an aggregate principal amount of $1.0 billion of senior notes due on October 1, 2031 (the “2031 Senior Notes” and together with the 2028 Senior Notes, the “Senior Notes”). The Senior Notes were issued within the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.
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In August and September 2023, the Company paid $177.2 million to repurchase $262.5 million of aggregate principal amount of the 2031 Senior Notes with a carrying value of $259.9 million, net of immaterial unamortized issuance costs and legal fees. The Company recorded a corresponding net gain on extinguishment of long-term debt during the year of $81.6 million in Other income, net within the Consolidated Statements of Operations.
The Company issued the Senior Notes at par, with the proceeds net of immaterial debt issuance costs. Interest on the Senior Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning in April 2022 at 3.375 % per annum for the 2028 Senior Notes and 3.625 % per annum for the 2031 Notes. The entire principal amount of the Senior Notes is due at the time of maturity, unless repurchased or redeemed at an earlier date. The Senior Notes were issued pursuant to an indenture, dated September 17, 2021, among the Company, the Guarantor (as defined below) and U.S. Bank National Association, as trustee (the “Senior Notes Indenture”).
The Senior Notes are redeemable at the Company’s discretion, in whole or in part, at any time. If redeemed prior to October 1, 2024 for the 2028 Senior Notes and October 1, 2026 for the 2031 Senior Notes, the redemption price is subject to a make-whole premium calculated by reference to then-current U.S. Treasury rates plus a fixed spread, plus any accrued and unpaid interest. If redeemed on or after those respective dates, the make-whole premium does not apply.
Upon the occurrence of a change of control triggering event (as defined in the Senior Notes Indenture), the Company must offer to repurchase each series of the Senior Notes at a repurchase price equal to 101 % of the principal amount of the Senior Notes to be repurchased, plus any accrued and unpaid interest, to, but excluding, the applicable repurchase date.
The Senior Notes are guaranteed by one of the Company’s domestic subsidiaries, Coinbase, Inc. (the “Guarantor”).
The Senior Notes Indenture contains customary covenants that restrict the ability of the Company and certain of its subsidiaries to incur debt and liens. The Company is not aware of any instances of non-compliance with the covenants as of December 31, 2025.
12. DERIVATIVES
During the periods presented, the Company’s derivatives were primarily embedded forward contracts to receive or deliver a fixed amount of crypto assets in the future and none were designated as hedging instruments.
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Impact of derivatives on the Consolidated Balance Sheets
The following table summarizes information on derivative instruments by their location in the Consolidated Balance Sheets, with amounts representing the portions of the respective line items denominated in crypto assets, as measured in U.S. dollar equivalents (in thousands):
| Embedded Derivative | ||||||||||||||||||||||||||
| Host | Gross Derivative Assets | Gross Derivative Liabilities | Aggregate Carrying Value | |||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
Accounts receivable, net | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||
Obligation to return collateral | ||||||||||||||||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||||||||||||||
| Total fair value of derivatives | $ | $ | ||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
Accounts receivable, net | $ | $ | $ | $ | ||||||||||||||||||||||
Other current assets | ||||||||||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||||||
Obligation to return collateral | ||||||||||||||||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||||||||||||||
| Total fair value of derivatives | $ | $ | ||||||||||||||||||||||||
Impact of derivatives on the Consolidated Statements of Operations
The impacts of gains (losses) on derivative instruments recognized in the Consolidated Statements of Operations were as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Short-term borrowings(1) | $ | $ | |||||||||
Obligation to return collateral(1) | ( | ||||||||||
Other(2) | ( | ||||||||||
| Total | $ | $ | ( | ||||||||
__________________
(1)Changes in fair value are recognized in Transaction expense in the Consolidated Statements of Operations. The impact of changes in fair value of Crypto asset borrowings and Obligation to return collateral derivatives is naturally offset, at least in part, by the impact of changes in fair value of the associated naturally offsetting positions, which are also recognized in Transaction expense.
(2)Changes in fair value are recognized in Other operating expense, net or Other income, net in the Consolidated Statements of Operations depending on the nature of the derivative.
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13. OTHER CONSOLIDATED BALANCE SHEETS DETAILS
The following table presents certain other details of the Consolidated Balance Sheets (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Other current assets | ||||||||||||||
| Prepaid expenses | $ | $ | ||||||||||||
| Income taxes receivable | ||||||||||||||
| Other | ||||||||||||||
| Total other current assets | $ | $ | ||||||||||||
| Other non-current assets | ||||||||||||||
| $ | $ | |||||||||||||
| Income taxes receivable | ||||||||||||||
| Other | ||||||||||||||
| Total other non-current assets | $ | $ | ||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Payroll and payroll related expenses | $ | $ | ||||||||||||
| Other accrued expenses | ||||||||||||||
| Income taxes payable | ||||||||||||||
| Other payables | ||||||||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||||||||
| Other non-current liabilities | ||||||||||||||
| $ | $ | |||||||||||||
| Other | ||||||||||||||
| Total other non-current liabilities | $ | $ | ||||||||||||
The Company’s long-lived assets, the majority of which are located in the United States, were not considered by management to be significant relative to total assets at each of December 31, 2025, 2024, and 2023.
Leases
The Company has operating leases, primarily relating to corporate offices in San Francisco, CA and New York, NY. The leases have remaining lease terms ranging from less than one year to 12 years, and generally have options to extend or terminate the lease that were not accounted for in determining the lease terms as the Company is not reasonably certain it will exercise those options.
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Future payments of lease liabilities as of December 31, 2025 were as follows (in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
Less: imputed interest | ( | ||||
Total lease liabilities | $ | ||||
As of December 31, 2025, the Company has entered into leases that have not yet commenced with future short-term and long-term lease payments of $3.0 million and $125.1 million, respectively. These leases are not yet recorded on the Consolidated Balance Sheets, and will commence between 2026 and 2027, with lease terms ranging from 5 to 10 years.
Other information related to recorded leases is as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term (in years) | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
14. FAIR VALUE MEASUREMENTS
The following table sets forth by level within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
Cash equivalents(1) | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted cash equivalents(2) | ||||||||||||||||||||||||||
Customer custodial funds(3) | ||||||||||||||||||||||||||
| Crypto assets held for operations | ||||||||||||||||||||||||||
| Crypto asset loan receivables | ||||||||||||||||||||||||||
| Crypto assets held as collateral | ||||||||||||||||||||||||||
| Crypto assets borrowed | ||||||||||||||||||||||||||
Marketable investments(4) | ||||||||||||||||||||||||||
| Crypto assets held for investment | ||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
__________________
(1)Represents money market funds. Excludes cash and cash equivalents of $5.2 billion and $2.7 billion as of December 31, 2025 and 2024, respectively.
(2)Represents money market funds. Excludes restricted cash and cash equivalents of $332.8 million and $345.8 million as of December 31, 2025 and 2024, respectively.
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(3)Represents customer custodial cash equivalents, which comprise money market funds. Excludes customer custodial funds of $1.9
(4)Primarily represents marketable equity securities. Excludes marketable investments not measured and recorded at fair value of $44.4 million as of December 31, 2025.
(5)See Note 12. Derivatives for additional details.
The Company has valued all Level 2 assets and liabilities measured at fair value on a recurring basis using quoted market prices as an observable input. This includes prices for underlying crypto assets and, for non-crypto denominated assets and liabilities, prices for similar assets and liabilities in inactive markets.
Assets and liabilities measured and recorded at fair value on a non-recurring basis
The Company’s non-financial assets, such as software and equipment, goodwill, and other intangible assets, are adjusted to fair value when an impairment charge is recognized.
The Company’s strategic investments are nearly all accounted for using the measurement alternative, whereby they are recognized at cost and adjusted to fair value for observable transactions for same or similar investments of the same issuer or for impairment, on a non-recurring basis. Fair value measurements for these strategic investments are based predominantly on Level 3 inputs to an Option-Pricing Model that uses publicly available market data of comparable companies and other unobservable inputs including expected volatility, expected time to liquidity, adjustments for other company-specific developments, and the rights and obligations of the securities the Company holds.
The impact on the Consolidated Statements of Operations from remeasurement of measurement alternative investments was immaterial for all periods presented, as were cumulative upward adjustments of measurement alternative investments outstanding at December 31, 2025 and 2024. Cumulative impairments and downward adjustments as of these dates were $127.7 million and $145.8 million, respectively.
Assets and liabilities not measured and recorded at fair value
Certain of the Company’s financial instruments are not measured and recorded at fair value but their carrying values approximate fair value due to their liquid or short-term nature. Financial instruments denominated in fiat or payment stablecoins that would be based on Level 1 valuation inputs if they were recorded at fair value include cash, restricted cash, payment stablecoins, certain customer custodial funds and related liabilities, collateral pledged, and obligations to return collateral. Financial instruments denominated in fiat or payment stablecoins that would be based on Level 2 valuation inputs if they were recorded at fair value include accounts receivable, loan receivables, accounts payable.
15. CAPITAL STOCK
Preferred stock
The Company’s certificate of formation (the “Certificate of Formation”) authorizes the issuance of 500,000,000 0.00001 per share with rights and preferences, including voting rights, designated from time to time by the Board.
Common stock
Pursuant to the Certificate of Formation, the Board is authorized to issue 10,000,000,000 500,000,000 500,000,000 shares of undesignated common stock.
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Dividend rights
Shares of Class A common stock and Class B common stock will be treated equally, identically, and ratably, on a per share basis, with respect to dividends that may be declared by the Board.
Voting rights
Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 20 votes per share. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters (including the election of directors) submitted to a vote of the shareholders of the Company.
Right to receive liquidation distributions
Upon a liquidation, dissolution, or winding-up of the Company, the assets legally available for distribution to shareholders would be distributed ratably among the holders of Class A common stock and Class B common stock and any participating preferred stock or new series of common stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock or new series of common stock.
Conversion
Shares of Class B common stock are convertible at any time at the option of the holder into shares of Class A common stock on a one -to-one basis. In addition, each share of Class B common stock will automatically convert into a share of Class A common stock upon a sale or transfer (other than with respect to certain estate planning and other transfers). Further, upon certain events specified in the Certificate of Formation, all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock. Once converted into Class A common stock, the Class B common stock will not be reissued.
Share repurchase program
In October 2024, the Board authorized and approved a share repurchase program, which provided for the repurchase of up to $1.0 billion of the Company’s Class A common stock without expiration and in October 2025, the Board (i) increased the aggregate repurchase authorization under the program from $1.0 billion to $2.0 billion and (ii) expanded the scope of the repurchases to include a portion of the aggregate principal amount of the Company’s outstanding 2026 Convertible Notes, 2029 Convertible Notes, 2030 Convertible Notes, 2032 Convertible Notes, and both series of Senior Notes (collectively, the “Notes”) (as modified, the “Repurchase Program”). Repurchases may be made from time to time in the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, in a tender offer, or by other methods in accordance with the applicable federal and state laws and regulations. The timing and amount of any repurchases will depend on market conditions and other considerations, and will be made at management’s discretion. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares of the Company’s Class A common stock or Notes and may be modified, suspended, or discontinued at any time. As of December 31, 2025, $790.2 million had been utilized to repurchase 3,039,095 shares under the Repurchase Program, and $1.2 billion remained available for future repurchases, when considered on a settlement date basis.
16. STOCK-BASED COMPENSATION
Stock plans
As of December 31, 2025, there were 21,173,773 shares of Class A common stock subject to issued and outstanding options, RSUs, and PRSUs, and 1,313,602 shares of Class B common stock subject to issued and outstanding options under the Plans. In addition, under the 2021 Plan and the ESPP, there
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were 67,626,288 shares and 13,255,824 shares, respectively, of Class A common stock available for issuance.
Stock options
Following is a summary of stock options activity, including performance-based options (in thousands, except per share and years data):
Weighted Average | |||||||||||||||||||||||
| Options Outstanding | Exercise Price Per Share | Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | |||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited and cancelled | ( | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Exercisable at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Vested and expected to vest at December 31, 2025 | $ | $ | |||||||||||||||||||||
The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the estimated fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2025, 2024, and 2023 w as $895.6 million, $1.2 billion, and $226.5 million, respectively.
During the years ended December 31, 2025, 2024, and 2023, 2,702,829 , 1,647,333 , and 4,567,625 stock options, respectively, vested with a weighted-average grant date fair value of $9.38 , $24.81 , and $15.93 per share, respectively.
The weighted-average assumptions inputs to the Black-Scholes-Merton Option-Pricing Model used to calculate the fair value of options granted during the year ended December 31, 2023, the most recent grants, were as follows (in percentages, except as noted):
| Dividend yield | |||||
| Expected volatility | |||||
| Expected term (in years) | |||||
| Risk-free interest rate | |||||
Chief Executive Officer performance stock options
On August 11, 2020, the Company granted its Chief Executive Officer an option award to purchase up to 9,293,911 shares of Class A common stock, at an exercise price of $23.46 per share and total grant date fair value of $56.7 million. Vesting of the award is dependent on both performance-based and market-based conditions being met. As of December 31, 2025, 5,613,522 of these options have vested, including 2,453,592 during the year then ended, while vesting of the remainder is subject to market conditions contingent on the Company’s Class A common stock price achieving certain stock price target milestones.
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Restricted stock units
Following is a summary of RSU activity (in thousands, except per share data):
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
| Balance at January 1, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited and cancelled | ( | ||||||||||
| Balance at December 31, 2025 | $ | ||||||||||
During the years ended December 31, 2024 and 2023, the weighted-average grant date fair value per share granted was $158.85 and $108.07 , respectively. During the years ended December 31, 2025, 2024, and 2023, the aggregate fair value as of the vest date of RSUs that vested was $1.0 billion, $1.4 billion, and $753.9 million, respectively.
Performance restricted stock units
Following is a summary of PRSU activity (in thousands, except per share data):
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
| Balance at January 1, 2025 | $ | ||||||||||
| Vested | ( | ||||||||||
| Balance at December 31, 2025 | $ | ||||||||||
President & Chief Operating Officer performance award
On April 20, 2023, the Company’s Compensation Committee granted the President & Chief Operating Officer an award of PRSUs covering up to a maximum of 803,966 shares of Class A common stock (the “2023 COO Performance Award”).
Up to 40 % of the 2023 COO Performance Award is subject to vesting based upon achievement of certain cumulative revenue and cumulative adjusted EBITDA target values which are separately evaluated for the period commencing January 1, 2023 and ending on December 31, 2025, subject to her continued employment until February 20, 2026 (the “Financial Performance Tranches”). Up to 60 % of the 2023 COO Performance Award is subject to vesting in increments based upon a relative shareholder return target value for the three annual periods between January 1, 2023 and December 31, 2025, and the three year period between January 1, 2023 and December 31, 2025, subject to her continued employment through the applicable year end dates (the “Market Tranches”). The total grant date fair value of the Market Tranches of this award was $25.1 million, while the grant date fair value of the Financial Performance Tranches was $19.5 million assuming maximum achievement. As of December 31, 2025, the performance and market targets for the unvested shares shown in the table above were achieved, while vesting remained subject to final certification or continued employment through the applicable vesting date (either January 15, 2026 or February 20, 2026).
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Stock-based compensation
Following are the effects of stock-based compensation on the Consolidated Statements of Operations and Consolidated Balance Sheets (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Statements of Operations | |||||||||||||||||
| Technology and development | $ | $ | $ | ||||||||||||||
| Sales and marketing | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Restructuring | |||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | ||||||||||||||
Balance Sheets | |||||||||||||||||
Software and equipment, net(1) | $ | $ | $ | ||||||||||||||
_______________
(1)Represents capitalized stock-based compensation that was recorded to Software and equipment, net during the years presented. See Note 9. Software and Equipment, Net for additional details.
During the years ended December 31, 2025, 2024, and 2023, the Company recognized an income tax benefit of $386.3 million, $537.7 million, and $205.6 million, respectively, related to stock-based compensation expense.
As of December 31, 2025, there was total unrecognized compensation cost of $417.4 million and $142.7 million related to unvested RSUs and RSAs, respectively, which is expected to be recognized over a weighted-average of 1.5 years and 3.4 years, respectively. Unrecognized compensation cost for all other stock-based compensation awards was immaterial at this date.
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17. OTHER CONSOLIDATED STATEMENTS OF OPERATIONS DETAILS
Disaggregation of relevant expense captions, as defined in ASU 2024-03, consisted of the following (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Technology and development | ||||||||||||||||||||
Employee-related(1) | $ | $ | $ | |||||||||||||||||
| Website hosting and infrastructure | ||||||||||||||||||||
Amortization, depreciation, and impairment(2) | ||||||||||||||||||||
Other(3) | ||||||||||||||||||||
Total technology and development | $ | $ | $ | |||||||||||||||||
Sales and marketing | ||||||||||||||||||||
| USDC rewards | $ | $ | $ | |||||||||||||||||
Marketing programs | ||||||||||||||||||||
Employee-related(1) | ||||||||||||||||||||
Other(4) | ||||||||||||||||||||
Total sales and marketing | $ | $ | $ | |||||||||||||||||
| General and administrative | ||||||||||||||||||||
Employee-related(1) | $ | $ | $ | |||||||||||||||||
| Professional services | ||||||||||||||||||||
Customer support(5) | ||||||||||||||||||||
Other(6) | ||||||||||||||||||||
Total general and administrative | $ | $ | $ | |||||||||||||||||
_______________
(1)Represents employee compensation, including transactions entered into for the benefit of employees such as health and wellness benefits.
(2)Comprises amortization, depreciation, and intangible asset impairment expenses, none of which are individually material except for amortization of internal-use software and other intangible assets, as quantified in Notes 9. Software and Equipment, Net and 10. Goodwill and Intangible Assets, Net, respectively.
(3) Comprises primarily costs of contract resources, consulting, and facilities.
(4) Comprises primarily costs of contract resources, travel, and software, as well as amortization, depreciation, and intangible asset impairment expenses.
(5) Excludes employee-related and professional services expenses.
(6) Comprises largely costs of contract resources, public policy efforts, software, and legal settlements. Also includes amortization, depreciation, and intangible asset impairments, none of which are individually material.
Other income, net consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(Gains) losses on investments, net(1) | $ | ( | $ | $ | ( | ||||||||||||
Other | ( | ( | ( | ||||||||||||||
| Total other income, net | $ | ( | $ | ( | $ | ( | |||||||||||
_______________
(1)Comprises gains and losses on Marketable and Strategic investments, excluding Crypto assets held for investment. For the year ended December 31, 2025, the amount includes $251.7 million in unrealized net gains on equity securities still held at December 31, 2025 and $438.0 million in realized net gains. See Note 14. Fair Value Measurements for additional details.
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18. INCOME TAXES
The components of income (loss) before income taxes were attributable to the following regions (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | $ | $ | ( | |||||||||||||
| Foreign | ( | ||||||||||||||||
| Total income (loss) before income taxes | $ | $ | $ | ( | |||||||||||||
Provision for (benefit from) income taxes consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | ( | $ | $ | |||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Total current | |||||||||||||||||
| Deferred | |||||||||||||||||
| Federal | ( | ||||||||||||||||
| State | |||||||||||||||||
| Foreign | ( | ( | |||||||||||||||
| Total deferred | ( | ||||||||||||||||
| Total provision for (benefit from) income taxes | $ | $ | $ | ( | |||||||||||||
The table below provides the updated requirements of ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) for 2025 and 2024.
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The effective income tax rate for the years ended December 31, 2025 and 2024 differs from the statutory federal income tax rate as follows (in thousands, except percentages):
Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
| Provision for income taxes at U.S. federal statutory rate | $ | % | $ | % | ||||||||||||||||||||||
State and local income taxes, net of federal benefit(1) | ||||||||||||||||||||||||||
| Foreign tax effects | ||||||||||||||||||||||||||
| Effect of cross-border tax laws: | ||||||||||||||||||||||||||
| Foreign Derived Intangible Income (“FDII”) | ( | ( | ( | ( | ||||||||||||||||||||||
| Other | ( | ( | ( | ( | ||||||||||||||||||||||
| Tax credits: | ||||||||||||||||||||||||||
| Research and development (“R&D”) credits | ( | ( | ( | ( | ||||||||||||||||||||||
| Valuation allowance | ( | ( | ||||||||||||||||||||||||
| Non-taxable or non-deductible items: | ||||||||||||||||||||||||||
| Equity compensation | ( | ( | ( | ( | ||||||||||||||||||||||
| Non-deductible compensation | ||||||||||||||||||||||||||
| Uncertain tax positions | ( | ( | ||||||||||||||||||||||||
| Adjustment to prior period provision | ( | ( | ||||||||||||||||||||||||
| Other adjustments | ||||||||||||||||||||||||||
| Total tax provision and effective tax rate | $ | % | $ | % | ||||||||||||||||||||||
________________
(1)State and local taxes in California, Texas, and New York City made up the majority (greater than 50%) of the tax effect in this category.
The Company’s effective tax rate of 17.20 % for the year ended December 31, 2025 is due primarily to tax benefits related to stock-based compensation, partially offset by state taxes and nondeductible expenses, including the impact of certain non-US losses.
The Company’s effective tax rate of 12.36 % for the year ended December 31, 2024 is due primarily to tax benefits related to stock-based compensation and federal R&D credits, reduced by state taxes and certain nondeductible compensation.
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As previously disclosed for the year ended December 31, 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
| Year Ended December 31, 2023 | ||||||||
| % | ||||||||
| U.S. statutory rate | % | |||||||
| State income taxes, net of federal benefit | % | |||||||
| Foreign rate differential | ( | % | ||||||
| Non-deductible compensation | ( | % | ||||||
| Equity compensation | % | |||||||
| Adjustment to prior year provision | % | |||||||
| R&D | % | |||||||
| Change in valuation allowance | % | |||||||
| Foreign tax credit | % | |||||||
| FDII | % | |||||||
| Global Intangible Low Taxed Income | ( | % | ||||||
| Uncertain tax positions | ( | % | ||||||
| Other | ( | % | ||||||
Effective income tax rate | % | |||||||
The Company’s effective tax rate of 223.46 % for the year ended December 31, 2023 is due primarily to a reduction of a valuation allowance related to impairment charges on crypto assets held and strategic investments and tax benefits related to federal R&D credits, reduced by certain nondeductible compensation, tax on non-U.S. earnings, and other nondeductible expenses related to political contributions.
The Company’s effective tax rate can be volatile based on the amount of pretax income or loss in the reporting period. For example, when pretax income is lower, the effect of reconciling items to the U.S. statutory rate, such as nondeductible expenses, will have a greater impact on the effective tax rate.
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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consisted of the following (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets | |||||||||||
| Obligation to return crypto assets held as collateral | $ | $ | |||||||||
| Accruals and reserves | |||||||||||
| Net operating loss carryforward | |||||||||||
| Lease liability | |||||||||||
| Tax credit carryforward | |||||||||||
| Stock-based compensation | |||||||||||
| Intangibles | |||||||||||
| Capitalized expenses | |||||||||||
| Gross deferred tax assets | |||||||||||
Less: valuation allowance | ( | ( | |||||||||
| Total deferred tax assets | |||||||||||
| Deferred tax liabilities | |||||||||||
| Crypto assets held as collateral | ( | ( | |||||||||
| State taxes | ( | ( | |||||||||
| Depreciation and amortization | ( | ( | |||||||||
| Intangibles | ( | ||||||||||
Lease ROU assets | ( | ( | |||||||||
Capital gains - unrealized | ( | ( | |||||||||
| Other | ( | ( | |||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Total net deferred tax assets | $ | $ | |||||||||
At each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. On the basis of this evaluation, only the portion of the deferred tax asset that is more likely than not to be realized was recognized. However, if the Company is not able to generate sufficient taxable income from its operations in the future, then a valuation allowance to reduce the Company’s U.S. deferred tax assets may be required, which would increase the Company’s expenses in the period the allowance is recognized.
On July 4, 2025, One Big Beautiful Bill Act (“OBBB”) was signed into law in the United States. OBBB includes significant changes to U.S. federal tax law, such as an elective deduction for domestic research and experimental expenditures, and changes to the tax rate on income from non-U.S. sources and subsidiaries. OBBB did not have a material impact on our current year effective tax rate. However, it did contribute to a decrease in the Company’s net deferred tax asset balance due to current year expensing of previously capitalized research and experimentation expenditures.
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Activity related to the Company’s valuation allowance consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance, beginning of period | $ | $ | $ | ||||||||||||||
| Charged (credited) to expenses | ( | ||||||||||||||||
| Balance, end of period | $ | $ | $ | ||||||||||||||
The Company’s valuation allowance as of December 31, 2025 was higher compared to 2024 due primarily to an increase in the valuation allowance related to foreign losses, partially offset by a decrease in the valuation allowance related to California R&D credits.
As of December 31, 2025, the Company also had R&D credits of $38.1 million and $112.4 million for federal and state income tax purposes, respectively. If not utilized, the federal R&D credits will expire in various amounts beginning in 2043. However, the state of California R&D credits can be carried forward indefinitely. The Company also had U.S. federal net operating loss carryforwards of $48.8 million as of December 31, 2025, and an estimated $45.8 million as of December 31, 2024. The U.S. federal net operating losses carry forward indefinitely. Additionally, the Company had U.S. state net operating losses of approximately $401.6 million as of December 31, 2025. Generally, California and other significant U.S. states have a twenty-year carryforward for net operating losses.
Activity related to the Company’s unrecognized tax benefits consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Balance, beginning of period | $ | $ | $ | ||||||||||||||
| Settlements | ( | ( | |||||||||||||||
| Increase related to tax positions taken during a prior year | |||||||||||||||||
Decrease related to tax positions taken during a prior year | ( | ( | |||||||||||||||
Increase related to tax positions taken during the current year | |||||||||||||||||
Effect of foreign currency translation | |||||||||||||||||
Balance, end of period | $ | $ | $ | ||||||||||||||
As of December 31, 2025 and 2024, the Company had unrecognized tax benefits of $175.2 million and $136.8 million, respectively, which would reduce income tax expense and affect the effective tax rate, if recognized. The Company accounts for interest and penalties related to exposures as a component of income tax expense. The Company recorded $6.7 million and $1.3 million of accrued interest and penalties, respectively, as of December 31, 2025 and $2.5 million and $3.5 million of accrued interest and penalties, respectively, as of December 31, 2024.
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19. NET INCOME PER SHARE
The computation of Net income per share, including the weighted-average shares outstanding (“WASO”) used in the computation, is as follows (in thousands, except per share amounts):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Numerators | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Less: net income allocated to participating shares | ( | ( | |||||||||||||||
| Net income attributable to common shareholders, basic | $ | $ | $ | ||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Add: interest on convertible notes, net of tax | |||||||||||||||||
| Less: net income allocated to participating shares | ( | ( | |||||||||||||||
| Net income attributable to common shareholders, diluted | $ | $ | $ | ||||||||||||||
| Denominators | |||||||||||||||||
| WASO - basic | |||||||||||||||||
| Weighted-average effect of potentially dilutive shares: | |||||||||||||||||
| Stock options | |||||||||||||||||
| Convertible notes | |||||||||||||||||
| Restricted stock units | |||||||||||||||||
| Performance restricted stock units | |||||||||||||||||
| Restricted stock | |||||||||||||||||
| WASO - diluted | |||||||||||||||||
| Net income per share attributable to common shareholders: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
The rights, including the liquidation and dividend rights, of the holders of Class A common stock and Class B common stock are identical, except with respect to voting. As a result, the undistributed earnings are allocated on a proportionate basis and the resulting income or loss per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis.
The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive, or in the case of performance awards, as the issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the reporting period (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Equity awards(1) | |||||||||||||||||
| Convertible notes | |||||||||||||||||
| Total | |||||||||||||||||
__________________
(1)Includes shares under the ESPP.
20. RESTRUCTURING
In January 2023, the Company announced a restructuring impacting 21 % of the Company’s headcount as of that date. The restructuring was intended to manage the Company’s operating expenses
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Notes to Consolidated Financial Statements
21. COMMITMENTS AND CONTINGENCIES
Contractual obligations
As of December 31, 2025, the Company had non-cancelable purchase obligations, primarily for technology services, as follows (in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
Total purchase obligations(1) | $ | ||||
_______________
(1) Committed spend for non-cancellable purchase obligations greater than $2.0 million per obligation.
Excluded from the table above is an additional $180.5 million in commitments as of December 31, 2025, arising from definitive agreements to acquire interests in entities, all payable within the year ending December 31, 2026.
Crypto assets and payment stablecoins on platform
The Company is obligated to securely store all crypto assets and payment stablecoins held or managed on behalf of customers in digital wallets on our platform, including our custody services, but including all assets for which we hold full keys. As such, the Company may be liable to its users for losses arising from the Company’s failure to secure these assets from theft or loss. The Company has not incurred any losses related to such obligations and therefore has not accrued any liabilities as of December 31, 2025 and 2024. The Company holds full keys to crypto assets and payment stablecoins held or managed on behalf of its customers totaling $376.1 billion and $404.0 billion at fair value at December 31, 2025 and 2024, respectively. These assets are not recognized in the Consolidated Balance Sheets. Similarly, as the Company has an obligation to securely store all of these assets, it has a corresponding unrecognized liability of $376.1 billion and $404.0 billion at December 31, 2025 and 2024, respectively. Since the risk of loss is remote, the Company did not recognize a contingent liability at December 31, 2025 or 2024. The Company has no reason to believe it will incur any expense associated with such potential liability because (i) it has no known or historical experience of claims to use as a basis of measurement, (ii) it accounts for and continually verifies the amount of crypto assets within its control, and (iii) it has established security around custodial product private keys to minimize the risk of theft or loss.
Indemnifications
In the event any registrable securities are included in a registration statement, the Company’s Amended and Restated Investors’ Rights Agreement (the “IRA”) entered into with certain of the Company’s shareholders provides indemnity to each shareholder, their partners, members, officers, directors, and shareholders and certain of their advisors; each underwriter, if any; and each person who controls each shareholder or underwriter, against any damages incurred in connection with investigating or defending any claim or proceeding arising as a result of such registration from which damages may result. The Company will reimburse each such party for any legal and any other expenses reasonably incurred, provided that the Company will not be liable in any such case to the extent the damages arise out of or are based upon any actions or omissions made in reliance upon and in conformity with written
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Notes to Consolidated Financial Statements
information furnished by or on behalf of such shareholder or underwriter and stated to be specifically for use therein.
The Company also has indemnity agreements with certain officers and directors of the Company pursuant to which the Company must indemnify the officer or director against all expenses, judgments, fines, and amounts paid in settlement reasonably incurred in connection with a third party proceeding, if the indemnitee acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and in the case of a criminal proceeding, had no reasonable cause to believe the indemnitee’s conduct was unlawful.
It is not possible to determine the maximum potential exposure under these indemnification agreements: (i) because the facts and circumstances involved in each claim are unique and the Company cannot predict the number or nature of claims that may be made; (ii) due to the unique facts and circumstances involved in each particular agreement; and (iii) due to the requirement for a registration of the Company’s securities before any of the indemnification obligations contemplated in the IRA become effective.
The Company has also provided indemnities or similar commitments on standard commercial terms in the ordinary course of business.
Legal and regulatory proceedings
The Company has been, currently is, and may from time to time become subject to claims, arbitrations, individual and class action lawsuits with respect to a variety of matters, including employment, consumer protection, intellectual property, privacy, information security, data protection, advertising, and securities. In addition, the Company has been, currently is, and may from time to time become subject to, government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. The Company reviews its lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and recognizes loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the Consolidated Financial Statements.
In October 2021, a purported class action captioned Underwood et al. v. Coinbase Global, Inc., was filed in the U.S. District Court for the Southern District of New York (the “District Court”) against the Company alleging claims under Sections 5, 15(a)(1) and 29(b) of the Exchange Act, and violations of certain California and Florida state statutes. On March 11, 2022, plaintiffs filed an amended complaint adding Coinbase, Inc. and Brian Armstrong as defendants and adding causes of action, including alleging claims under Sections 5, 12(a)(1) and 15 of the Securities Act and violations of certain New Jersey state statutes. Among other relief requested, the plaintiffs sought injunctive relief, unspecified damages, attorneys’ fees and costs. On February 1, 2023, the District Court dismissed all federal claims (with prejudice) and state law claims (without prejudice) against Coinbase Global, Inc., Coinbase, Inc. and Brian Armstrong. Subsequently, on February 9, 2023, the plaintiffs appealed that ruling to the U.S. Court of Appeals for the Second Circuit (the “Court of Appeals”), and the parties completed briefing the appeal on September 13, 2023. Oral argument took place on February 1, 2024 and on April 5, 2024, the Court of Appeals issued a Summary Order affirming the District Court’s dismissal order with respect to the claims alleging violations of the Exchange Act, and reversing the District Court’s dismissal order with respect to the claims alleging violations of the Securities Act and violations of the state statutes. On June 27, 2024, defendants filed an answer to the amended complaint, and on July 29, 2024, the defendants filed a Motion for Judgment on the Pleadings requesting the District Court dismiss the remaining claims. On February 7, 2025, the District Court denied defendants’ Motion for Judgment on the Pleadings and allowed the case to proceed to bifurcated discovery, followed by summary judgment motions. The defendants continue to dispute the claims in this case and intend to vigorously defend against them.
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Notes to Consolidated Financial Statements
Based on the nature of the proceedings in this case, the outcome of this matter remains uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time.
In June 2023, the Company and Coinbase, Inc. were issued notices, show-cause orders, and cease-and-desist letters, and became the subject of various legal actions initiated by U.S. state securities regulators in the states of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin alleging violations of state securities laws with respect to staking services provided by Coinbase, Inc. In July 2023, the Company and Coinbase, Inc. entered into agreements with state securities regulators in California, New Jersey, South Carolina and Wisconsin, pursuant to which customers in those states will no longer be able to stake new funds, in each case pending final adjudication of the matters. In October 2023, the Company and Coinbase, Inc. entered into a similar agreement with the Maryland state securities regulator. In March and April 2025, the Alabama, Kentucky, Illinois, South Carolina, and Vermont state securities regulators dismissed, vacated, rescinded, and/or withdrew their legal actions. The Company and Coinbase, Inc. dispute the claims of the state securities regulators and intend to vigorously defend against them. Based on the preliminary nature of these actions, the final outcome of these matters remains uncertain and the Company cannot estimate the potential impact on its business or financial statements at this time. An adverse resolution in these state matters could have a material impact on the Company’s business and financial statements.
The Company has, from time to time, received investigative subpoenas and requests from regulators for documents and information, including about certain customer programs, operations, and existing and intended future products, including the Company’s processes for listing assets, the classification of certain listed assets, its staking programs, and its stablecoin and yield-generating products.
Except as otherwise disclosed, the Company believes the ultimate resolution of existing legal and regulatory investigation matters will not have a material adverse effect on the financial condition, results of operations, or cash flows of the Company. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results of operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results of operations, potentially materially.
Tax regulation
Current tax rules related to crypto assets are evolving and require significant judgments to be made in interpretation of the law, including but not limited to the areas of income tax, information reporting, value added taxes, digital services tax, transaction level taxes and the withholding of tax at source. Further, it is possible that additional legislation or guidance may be issued by U.S. and non-U.S. governing bodies that may differ significantly from the Company’s practices or interpretation of the law, which could have unforeseen effects on the Company’s financial condition and results of operations, and accordingly, the Company is unable to determine an estimate of the possible loss or range of loss beyond amounts already accrued. As a result, the Company may have exposure to additional tax liabilities that could have an adverse effect on the Company’s operating results and financial condition.
22. RELATED PARTY TRANSACTIONS
Related party customer activity
Certain of the Company’s directors, executive officers, and principal owners, including immediate family members, are users of the Company’s platform. The Company recognized the following from related party customer activity:
•Total revenue of $9.6 million, $22.7 million, and $17.9 million during the years ended December 31, 2025, 2024, and 2023, respectively;
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Notes to Consolidated Financial Statements
•Accounts receivable, net of $0.4 million and $2.7 million as of December 31, 2025 and 2024, respectively;
•Transaction expense of $0.1 million, $0.1 million and an immaterial amount during the years ended December 31, 2025, 2024, and 2023, respectively; and
•Customer custodial funds and Customer custodial fund liabilities of each $11.0 44.0
Related party investments
The Company made strategic investments of an aggregate of $14.2 million and $12.1 million during the years ended December 31, 2025 and 2024, respectively, in investees in which certain related parties of the Company held an interest over 10%.
Other related party activity
General and administrative costs from related party activities, primarily consulting services provided by entities affiliated with related parties, were $0.1 million, $1.4 million, and $2.5 million, during the years ended December 31, 2025, 2024, and 2023, respectively.
23. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
The following is a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents (in thousands):
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash and cash equivalents | $ | $ | $ | ||||||||||||||
| Restricted cash and cash equivalents | |||||||||||||||||
| Customer custodial cash and cash equivalents | |||||||||||||||||
| Total cash, cash equivalents, and restricted cash and cash equivalents | $ | $ | $ | ||||||||||||||
The following is a supplemental schedule of non-cash investing and financing activities (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Non-cash consideration paid for business combinations | $ | $ | $ | ||||||||||||||
| Crypto assets borrowed | |||||||||||||||||
| Crypto assets borrowed repaid | |||||||||||||||||
| Customer crypto assets received as collateral | |||||||||||||||||
| Customer crypto asset collateral returned | |||||||||||||||||
| Crypto asset loan receivables originated | |||||||||||||||||
| Crypto asset loan receivables repaid | |||||||||||||||||
| Additions of crypto asset investments | |||||||||||||||||
| Cumulative-effect adjustment upon adoption of ASU 2023-08 | — | — | |||||||||||||||
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Notes to Consolidated Financial Statements
The following is a supplemental schedule of cash paid for income taxes (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash paid during the period for income taxes, net of refunds: | |||||||||||||||||
| U.S. Federal | $ | $ | $ | ||||||||||||||
| U.S. State and local | |||||||||||||||||
| Foreign | |||||||||||||||||
Total cash paid during the period for income taxes, net of refunds | $ | $ | $ | — | |||||||||||||
Cash paid during the period for income taxes (pre ASU 2023-09) | $ | — | $ | — | $ | ||||||||||||
24. SUBSEQUENT EVENTS
In January 2026, the Board approved an increase in the aggregate repurchase authorization under the Repurchase Program from $2.0 billion to $4.0 billion. Subsequent to December 31, 2025 and through February 10, 2026, the Company repurchased 5,188,656 shares of Class A common stock for $954.7 million in cash under the Repurchase Program, leaving $2.3 billion available for future repurchases, all when considered on a settlement date basis.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2025, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
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Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2025.
Excluded from our evaluation were internal controls over financial reporting at Sentillia B.V., for which control was acquired on August 14, 2025. The financial statements of this entity constitute less than 1% of total assets and 2% of total revenue as of and for the year ended December 31, 2025, respectively.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included in Part II, Item 8 of this Annual Report on Form 10-K.
Changes in Internal Controls Over Financial Reporting
There were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
The Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) are only permitted to trade in the Company’s securities pursuant to a prearranged trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act (a “Rule 10b5-1 Plan”). During the three months ended December 31, 2025, one of the Company’s officers adopted a Rule 10b5-1 Plan, which was entered into during an open trading window in accordance with the Company’s Insider Trading Policy and Trading Plan Policy.
On December 3, 2025 , Lawrence Brock , the Company’s Chief People Officer , entered into a Rule 10b5-1 Plan (the “Brock Plan”) providing for the potential sale of up to 86,393 shares of Class A common stock owned by Mr. Brock, plus an additional undetermined number of shares of Class A common stock to be received by Mr. Brock upon the future grant, vesting, and settlement of RSUs for shares of Class A common stock, including upon the vesting and settlement of RSUs for shares of Class A common stock and the exercise of vested stock options for shares of Class A common stock, so long as the market price of the Class A common stock is higher than certain minimum threshold prices specified in the Brock Plan or, in certain circumstances, at the market price, between an estimated start date of March 4, 2026 and May 28, 2027 . The Brock Plan provides for the sale of shares of Class A common stock to be received by Mr. Brock upon the future grant, vesting, and settlement of RSUs for shares of Class A common stock.
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The Brock Plan also provides for the sale of shares of Class A common stock to be received upon the future vesting and settlement of certain outstanding RSUs, net of any shares withheld or mandatorily sold by the Company to satisfy applicable tax obligations and shares sold pursuant to Mr. Brock’s prior Rule 10b5-1 Plan dated December 2, 2024 (the “Prior Brock Plan”). The numbers of shares (i) to be received by Mr. Brock upon the future grant, vesting, and settlement of RSUs for shares of Class A common stock and (ii) to be withheld or mandatorily sold by the Company or sold pursuant to the Prior Brock Plan, and therefore the exact number of shares to be sold pursuant to the Brock Plan, can only be determined upon the occurrence of the future vesting events. For purposes of this disclosure, we have included the maximum aggregate number of shares to be sold without (i) including any shares to be sold upon the future vesting and settlement of any RSUs that have not yet been granted and (ii) subtracting any shares to be withheld or mandatorily sold by the Company upon future vesting events or to be sold pursuant to the prior Brock Plan.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
PART III I
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after December 31, 2025.
Insider Trading Policies and Procedures
The Company has insider trading policies and procedures that govern the purchase, sale, and other dispositions of its securities by directors, officers, employees, contractors, advisors, and consultants, and the Company itself, that the Company believes are reasonably designed to promote compliance with insider trading laws, rules and regulations and the listing standards of Nasdaq. A copy of the Company’s Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after December 31, 2025.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after December 31, 2025.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after December 31, 2025.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2026 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after December 31, 2025.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1.Financial Statements
The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K:
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
2.Financial Statement Schedules
All schedules have been omitted because the required information is included in the Consolidated Financial Statements or the notes thereto, or because it is not required.
3.Exhibits
The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below.
| Incorporated by Reference | Filed or Furnished Herewith | |||||||||||||||||||||||||||||||||||||
| Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||||||||
2.1 | Share Purchase Agreement, dated as of May 8, 2025, by and among Coinbase Global, Inc, Sentillia B.V., the Deribit Shareholders listed on Exhibit B thereto and Shareholder Representative Services LLC as the shareholders’ agent | 8-K | 001-40289 | 2.1 | 5/8/2025 | |||||||||||||||||||||||||||||||||
3.1 | Certificate of Formation | 8-K | 001-40289 | 3.1 | 12/15/2025 | |||||||||||||||||||||||||||||||||
3.2 | Bylaws | 8-K | 001-40289 | 3.2 | 12/15/2025 | |||||||||||||||||||||||||||||||||
4.1 | Form of the Registrant’s Class A common stock certificate | X | ||||||||||||||||||||||||||||||||||||
4.2 | Amended and Restated Investors’ Rights Agreement by and between the Registrant and certain securityholders dated March 15, 2021 | S-1 | 333-253482 | 4.2 | 3/17/2021 | |||||||||||||||||||||||||||||||||
4.3 | Indenture, dated as of May 21, 2021, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee | 8-K | 001-40289 | 4.1 | 5/21/2021 | |||||||||||||||||||||||||||||||||
4.4 | Form of 0.50% Convertible Senior Notes due 2026 (included in Exhibit 4.3) | 8-K | 001-40289 | 4.2 | 5/21/2021 | |||||||||||||||||||||||||||||||||
4.5 | First Supplemental Indenture, dated as of December 12, 2025, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee (2026 Notes) | 8-K | 001-40289 | 4.1 | 12/16/2025 | |||||||||||||||||||||||||||||||||
4.6 | Indenture, dated as of September 17, 2021, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee | 8-K | 001-40289 | 4.1 | 9/17/2021 | |||||||||||||||||||||||||||||||||
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4.7 | Form of 3.375% Senior Notes due 2028 (included in Exhibit 4.6) | 8-K | 001-40289 | 4.2 | 9/17/2021 | |||||||||||||||||||||||||||||||||
4.8 | Form of 3.625% Senior Notes due 2031 (included in Exhibit 4.6) | 8-K | 001-40289 | 4.3 | 9/17/2021 | |||||||||||||||||||||||||||||||||
4.9 | Indenture, dated as of March 18, 2024, between Coinbase Global, Inc. and U.S. Bank Trust Company, National Association, as trustee | 8-K | 001-40289 | 4.1 | 3/18/2024 | |||||||||||||||||||||||||||||||||
4.10 | Form of 0.25% Convertible Senior Notes due 2030 (included in Exhibit 4.9) | 8-K | 001-40289 | 4.2 | 3/18/2024 | |||||||||||||||||||||||||||||||||
4.11 | First Supplemental Indenture, dated as of December 12, 2025, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee (2030 Notes) | 8-K | 001-40289 | 4.3 | 12/16/2025 | |||||||||||||||||||||||||||||||||
4.12 | Indenture, dated as of August 8, 2025, between Coinbase Global, Inc. and U.S. Bank Trust Company, National Association, as trustee | 8-K | 001-40289 | 4.1 | 8/8/2025 | |||||||||||||||||||||||||||||||||
4.13 | Form of 0% Convertible Senior Notes due 2029 (included in Exhibit 4.12) | 8-K | 001-40289 | 4.2 | 8/8/2025 | |||||||||||||||||||||||||||||||||
4.14 | First Supplemental Indenture, dated as of December 12, 2025, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee (2029 Notes) | 8-K | 001-40289 | 4.2 | 12/16/2025 | |||||||||||||||||||||||||||||||||
4.15 | Indenture, dated as of August 8, 2025, between Coinbase Global, Inc. and U.S. Bank Trust Company, National Association, as trustee | 8-K | 001-40289 | 4.3 | 8/8/2025 | |||||||||||||||||||||||||||||||||
4.16 | Form of 0% Convertible Senior Notes due 2032 (included in Exhibit 4.12) | 8-K | 001-40289 | 4.4 | 8/8/2025 | |||||||||||||||||||||||||||||||||
4.17 | First Supplemental Indenture, dated as of December 12, 2025, between Coinbase Global, Inc. and U.S. Bank National Association, as trustee (2032 Notes) | 8-K | 001-40289 | 4.4 | 12/16/2025 | |||||||||||||||||||||||||||||||||
4.18 | Description of Class A common stock registered under Section 12 of the Securities Exchange Act of 1934, as amended | X | ||||||||||||||||||||||||||||||||||||
10.1 | Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers | X | ||||||||||||||||||||||||||||||||||||
| 10.2† | 2013 Amended and Restated Stock Plan and forms of award agreements thereunder | S-1 | 333-253482 | 10.2 | 2/25/2021 | |||||||||||||||||||||||||||||||||
10.3† | 2019 Equity Incentive Plan, as amended, and forms of award agreements thereunder | S-1 | 333-253482 | 10.3 | 2/25/2021 | |||||||||||||||||||||||||||||||||
10.4† | 2021 Equity Incentive Plan and forms of award agreements thereunder | X | ||||||||||||||||||||||||||||||||||||
10.5† | 2021 Employee Stock Purchase Plan and forms of enrollment agreements thereunder | 10-K | 001-40289 | 10.5 | 2/13/2025 | |||||||||||||||||||||||||||||||||
10.6† | Form of Immediately Exercisable Stock Option Agreement under the 2021 Equity Incentive Plan | 10-K | 001-40289 | 10.6 | 2/25/2022 | |||||||||||||||||||||||||||||||||
10.7† | Employment Agreement by and between the Registrant and Brian Armstrong, dated February 18, 2021 | S-1 | 333-253482 | 10.6 | 2/25/2021 | |||||||||||||||||||||||||||||||||
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10.8† | Employment Agreement by and between the Registrant and Paul Grewal, dated February 11, 2021 | S-1 | 333-253482 | 10.8 | 2/25/2021 | |||||||||||||||||||||||||||||||||
10.9† | Employment Agreement by and between the Registrant and Alesia J. Haas, dated March 29, 2021 | 10-K | 001-40289 | 10.10 | 2/25/2022 | |||||||||||||||||||||||||||||||||
10.10† | Employment Agreement by and between the Registrant and Emilie Choi, dated April 8, 2021 | 10-K | 001-40289 | 10.11 | 2/25/2022 | |||||||||||||||||||||||||||||||||
10.11† | Employment Agreement by and between the Registrant and Lawrence Brock, dated February 11, 2023 | 10-K | 001-40289 | 10.11 | 2/15/2024 | |||||||||||||||||||||||||||||||||
10.12† | Amended and Restated Change of Control and Severance Policy | X | ||||||||||||||||||||||||||||||||||||
10.13 | Form of Capped Call Transaction Confirmation relating to 0.50% Convertible Senior Notes due 2026 | 8-K | 001-40289 | 10.1 | 5/21/2021 | |||||||||||||||||||||||||||||||||
10.14 | Form of Capped Call Transaction Confirmation relating to 0.25% Convertible Senior Notes due 2030 | 8-K | 001-40289 | 10.1 | 3/18/2024 | |||||||||||||||||||||||||||||||||
10.15 | Form of Capped Call Transaction Confirmation relating to 0% Convertible Senior Notes due 2029 and 0% Convertible Senior Notes due 2032 | 8-K | 001-40289 | 10.1 | 8/8/2025 | |||||||||||||||||||||||||||||||||
10.16*^ | Collaboration Agreement by and between the Registrant and Circle Interest Financial, LLC, dated August 18, 2023 | X | ||||||||||||||||||||||||||||||||||||
10.17*^ | Stablecoin Ecosystem Agreement by and between the Registrant and Circle Interest Financial, LLC, dated November 14, 2024 | 10-K | 001-40289 | 10.16 | 2/13/2025 | |||||||||||||||||||||||||||||||||
18.1 | Preferability Letter of Deloitte & Touche LLP regarding change in accounting principle | X | ||||||||||||||||||||||||||||||||||||
19.1 | Insider Trading Policy | X | ||||||||||||||||||||||||||||||||||||
21.1 | List of Subsidiaries of the Registrant | X | ||||||||||||||||||||||||||||||||||||
23.1 | Consent of Deloitte & Touche LLP, independent registered public accounting firm | X | ||||||||||||||||||||||||||||||||||||
24.1 | Power of Attorney (included on the signature page of this Annual Report on Form 10-K) | X | ||||||||||||||||||||||||||||||||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
172
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
97.1 | Compensation Recovery Policy | X | ||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | X | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File - the cover page from the registrant’s Annual Report on Form 10-K for the year ended December 31, 2025 is formatted as Inline XBRL and contained in Exhibit 101 | X | ||||||||||||||||||||||||||||||||||||
† Indicates a management or compensatory plan or arrangement in which directors or executive officers are eligible to participate.
* The Registrant has omitted portions of the exhibit (indicated by “[*]”) as permitted under Item 601(b)(10)(iv) of Regulation S-K, which portions will be furnished to the SEC upon request.
^ The Registrant has omitted schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.
The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act.
ITEM 16. FORM 10-K SUMMARY
None
173
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
| COINBASE GLOBAL, INC. | ||||||||
Date: February 12, 2026 | By: | /s/ Brian Armstrong | ||||||
Brian Armstrong Chief Executive Officer and Director | ||||||||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Brian Armstrong and Alesia J. Haas, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
174
| Name | Title | Date | ||||||||||||
| /s/ Brian Armstrong | Chief Executive Officer and Chairman of the Board | February 12, 2026 | ||||||||||||
| Brian Armstrong | (Principal Executive Officer) | |||||||||||||
| /s/ Alesia J. Haas | Chief Financial Officer | February 12, 2026 | ||||||||||||
| Alesia J. Haas | (Principal Financial Officer) | |||||||||||||
| /s/ Jennifer N. Jones | Chief Accounting Officer | February 12, 2026 | ||||||||||||
| Jennifer N. Jones | (Principal Accounting Officer) | |||||||||||||
| /s/ Marc L. Andreessen | Director | February 12, 2026 | ||||||||||||
| Marc L. Andreessen | ||||||||||||||
/s/ Paul Clement | Director | February 12, 2026 | ||||||||||||
Paul Clement | ||||||||||||||
/s/ Christa Davies | Director | February 12, 2026 | ||||||||||||
Christa Davies | ||||||||||||||
| /s/ Frederick Ernest Ehrsam III | Director | February 12, 2026 | ||||||||||||
| Frederick Ernest Ehrsam III | ||||||||||||||
| /s/ Kelly Kramer | Director | February 12, 2026 | ||||||||||||
| Kelly Kramer | ||||||||||||||
/s/ Chris Lehane | Director | February 12, 2026 | ||||||||||||
Chris Lehane | ||||||||||||||
| /s/ Tobias Lütke | Director | February 12, 2026 | ||||||||||||
| Tobias Lütke | ||||||||||||||
| /s/ Gokul Rajaram | Director | February 12, 2026 | ||||||||||||
| Gokul Rajaram | ||||||||||||||
| /s/ Fred Wilson | Director | February 12, 2026 | ||||||||||||
| Fred Wilson | ||||||||||||||
175
Coinbase Global, Inc.
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