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What changed in Coinbase's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Coinbase's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+697 added−696 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Coinbase's 2025 10-K

697 paragraphs added · 696 removed · 548 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

86 edited+30 added−19 removed66 unchanged
Biggest changeNoncompliance with these rules could result in fines or penalties levied by the card association or payment network for certain acts or omissions, or the termination of our ability to offer prepaid cards. 19 Table of Contents Association and network rules The bylaws and agreements between clearing house participants and bankcard companies impose specific responsibilities and liabilities for issuers of debit cards.
Biggest changeFurthermore, 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 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 other products such as trading.
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.
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.
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.
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 semi-annual pulse surveys to continuously optimize our culture, employee engagement, risk management, and productivity.
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 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.
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.
As a result, our lending activities are subject to various state lending laws and licensure requirements with respect to lending activities within such state. These state lending laws may be enforced by state attorneys general, state financial regulators, and private litigants, among others.
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.
For additional information, see Risk Factors—Our failure to securely store and manage our and our customers’ fiat currencies and crypto assets could adversely impact 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 impact our business, operating results, and financial condition included in Part I, Item 1A of this Annual Report on Form 10-K.
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.
Human Capital Powering the cryptoeconomy 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.
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.
Advanced trading focuses on sophisticated traders who are prioritizing a robust set of features to meet their more complex needs and higher volume. We generate fees from consumers trading on our platform, including through volume-based transaction fees and a spread depending on the type of trade.
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.
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 16 Table of Contents persons and inspection and examination by state regulatory agencies.
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.
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-custody wallet or to other addresses on the Ethereum blockchain.
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.
Subject to jurisdiction, we support eight staking assets through our platform for consumers as of December 31, 2024: Cardano (ADA), Avalanche (AVAX), Cosmos (ATOM), Polkadot (DOT), Ethereum (ETH), MATIC (POL), Solana (SOL), and Tezos (XTZ).
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).
These agencies, as well as certain other governmental bodies, including state attorneys general, have broad consumer protection 18 Table of Contents 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.
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.
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.
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.
Securities In recent years, 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.
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.
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-public information and for complying with our disclosure obligations under Regulation FD.
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- 20 Table of Contents public information and for complying with our disclosure obligations under Regulation FD.
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 15 Table of Contents requirements, and collect and maintain information about our customers.
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.
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 mechanism to mining. Network participants can designate a certain amount of their crypto assets on the network to validate transactions and earn rewards.
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 9 Table of Contents mechanism to mining. Network participants can designate a certain amount of their crypto assets on the network to validate transactions and earn rewards.
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 17 Table of Contents crypto asset transactions could be deemed securities.
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.
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 employees in the countries where we operate.
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 18 Table of Contents employees in the countries where we operate.
Our lending product set includes tools to allow clients to trade in real time, products that enable leverage and short access across our Prime and Markets offerings, and structured loans supporting client working capital and other 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.
Customers who stake their assets receive compensation, paid out by applicable blockchain protocols, in 9 Table of Contents 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.
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.
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.
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.
Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the cryptoeconomy, 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.
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.
In addition to lending, we borrow fiat and crypto assets, including USDC, 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. The terms of our lending and borrowing arrangements may vary modestly from customer to customer.
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. 10 Table of Contents The terms of our lending and borrowing arrangements may vary modestly from customer to customer.
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 ongoing obligations under the Circle Agreement.
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.
For example, in addition to robust 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.
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.
As of December 31, 2024, over $8.1 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.
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.
Additionally, as a U.S. public company, we are required to undergo annual audits and quarterly reviews, which, among other things, require that our independent registered public accounting firm reviews and audits our internal controls and reconciliation processes. Moreover, our various user, custody, and client agreements outline the applicability of Uniform Commercial Code (“UCC”) Article 8 to custodied crypto assets.
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.
Coinbase, Inc. and CCTC, the two subsidiaries that custody the majority of crypto assets on platform, are also periodically examined by a variety of regulators, including the New York State Department of Financial Services (“NYDFS”) and various states in which such entities hold money transmission licenses.
Coinbase, Inc. and CCTC, the two subsidiaries that custody the majority of crypto assets on platform, are periodically examined by regulators, including the 12 Table of Contents New York State Department of Financial Services (“NYDFS”) and various states in which such entities hold money transmission licenses.
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. We store crypto assets using proprietary technology and operational processes.
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.
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 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.
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.
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.
Card association and payment network rules In addition to the federal and state laws and regulations governing prepaid cards, we, as well as the bank that issues our Coinbase Card, are subject to and required to comply with card association and payment network rules and guidelines which apply to 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.
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, 2024, we had 3,772 employees.
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.
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 because advanced traders typically trade at higher volumes than simple traders.
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.
Custodial practices 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 stored and secured at facilities within the United States and internationally.
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.
No single individual has control of Coinbase’s wallet private keys. To the extent a customer withdrawal requires movement of assets from a cold wallet, authority to release proceeds from such wallet resides with a geographically distributed team of professionals, all of whom are subject to background checks as part of the onboarding process.
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.
In August 2023, our subsidiary, Coinbase Financial Markets, Inc. secured regulatory approval from the National Futures Association to operate as a futures commission merchant (“FCM”), in September 2023, Coinbase International Exchange secured regulatory approval from the BMA 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.
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.
These state licensing laws also cover matters such as regulatory approval of controlling stockholders, directors, and senior management of the licensed entity. Outside the United States, we have obtained licenses to provide crypto-asset custody and trading from the German Federal Financial Supervisory Authority (BaFin). In Singapore, we hold a major payment institution license issued by the Monetary Authority of Singapore.
These state licensing laws also cover matters such as regulatory approval of controlling shareholders, directors, and senior management of the licensed entity. 16 Table of Contents 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.
Pursuant to the Circle Agreement, Circle 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.
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.
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, higher staking and USDC rewards than non-Coinbase One subscribers, priority customer service support, and offers from third-party partners.
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.
Legal requirements for prepaid cards 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.
Prepaid cards, card association and payment network rules 19 Table of Contents 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.
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.
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. 13 Table of Contents Our main competition falls into the following categories: • traditional financial services and financial technology companies.
We, as well as the bank that issues our Coinbase Card, 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.
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.
Prime Trading Coinbase Prime 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. Markets We provide market infrastructure in the form of trading venues for customers to trade spot and derivatives.
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 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.
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.
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. Coinbase Global, Inc.’s principal assets are its interests in the equity of Coinbase, Inc.
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.
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 cases, more stringent requirements related to anti-money laundering and counter-terrorist financing.
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.
The laws and regulations impose compliance obligations and costs on our business, and failure to comply could result in litigation, enforcement actions, and penalties.
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.
In accordance with applicable state money transmitter laws, we hold U.S. customers’ 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 12 Table of Contents holding the funds as custodian.
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.
Our culture has and will continue to evolve but, at our core, we prioritize the following tenets: • Clear communication • Efficient execution • Act like an owner • Top talent • Championship team • Continuous learning • Customer focus • Repeatable innovation • Positive energy • Mission first 14 Table of Contents We are a remote-first company.
We operate with the following tenets: • Clear communication • Efficient execution • Act like an owner • Top talent • Championship team • Continuous learning • Customer focus 14 Table of Contents • Repeatable innovation • Positive energy • Mission first We are a remote-first company.
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 Money Services Business with the Financial Transactions and Reports Analysis Centre of Canada, and we have registered as a Restricted Dealer by the Canadian Securities Administrators, with the Ontario Securities Commission as its Principal Regulator.
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.
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; 13 Table of Contents • 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 non-custodial platforms; and • stablecoins, other than USDC, and fiat currencies globally.
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.
In addition to operating our own validator nodes to provide staking services, we utilize third-party service providers to operate validator nodes on our customers’ behalf. Institutional customers receive rewards directly from the protocol as we do not stake on behalf of these customers. The fees we charge to institutional customers depend on the customer agreement and the selected service.
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.
Examples of these offerings include, among others: (i) educational materials, including but not limited to an online collection of how-to guides and tutorials, a crypto developments newsletter, Coinbase Bytes, and our learning rewards program, a video content-driven educational platform available on our Coinbase app and our website, through which customers can earn small rewards, paid out in cryptocurrency, upon successful completion of a video and a short quiz on a range of topics related to the cryptoeconomy, (ii) in-app 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.
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 11 Table of Contents 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.
Economic and trade sanctions programs administered by OFAC and by certain foreign jurisdictions 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.
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.
Additionally, our Coinbase Asset Management offering utilizes both Coinbase and third parties as custodians. As part of our risk mitigation efforts, wallet private keys are not stored in plaintext format in any location and the cryptographic consensus of multiple human operators is required to decrypt a private key for both hot and cold wallets.
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.
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 provided to our customers. ” Custody We offer an institutional-grade custody platform with a highly secure cold storage solution both within the United States and globally.
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.
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. Further, we appropriately ledger, properly segregate, and maintain separate accounts for our corporate crypto assets and customers’ crypto assets.
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.
Prohibitions on bribery and anti-corruption We are subject to regulations imposed by the FCPA in the United States and similar laws in other countries, such as the Bribery Act 2010 in the United Kingdom (the “Bribery Act”), which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials for the purpose of obtaining or retaining business.
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.
These laws, rules, and regulations evolve frequently and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another.
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.
Crypto assets and use cases are rapidly expanding and Coinbase seeks to offer our customers access to all assets and use cases where it is safe and legal to do so. For example, we take a number of steps to mitigate conflicts in our digital asset listing process.
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.
As of December 31, 2024, approximately $15.2 billion worth of these assets were held on behalf of individual consumers staked through our platform, as adjusted to USD. For our institutional customers, our staking process varies by customer.
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.
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 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.
Some of these laws, such as the Bribery Act, also prohibit improper payments between private entities and persons.
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.
A number of enforcement actions and regulatory proceedings have since been initiated against digital assets and digital asset products, as well as against trading platforms that support digital assets. 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.
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.
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.
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.
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 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 also evaluate all other products and services prior to launch under U.S. federal and applicable international securities laws. Commodities and derivatives The Commodity Futures Trading Commission (“CFTC”) has stated, and CFTC enforcement actions have confirmed, that at least some crypto assets, including Bitcoin and Ethereum, fall within the definition of a “commodity” under the U.S.
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”).
Therefore, where permitted, we pay rewards to both consumer and institutional customers who hold USDC to incentivize on-platform balances and deeper engagement with our product suite. In 2024, we began paying rewards onchain to customers holding USDC balances in Coinbase Wallet. Staking Staking is one of our most popular services.
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.
A benefit of Coinbase Wallet is that consumers have sole control over their private keys and/or seed phrase, which are stored directly on their mobile devices or personal storage accounts and not with a centralized entity.
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.
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.
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.
We offer two trading experiences: • Simple trade : Our simple trading experience offers customers the ability to buy, sell, and convert crypto assets using the basic interface of our platform, and includes value-added services such as fixed price quotes and recurring trades.
We offer our trading products through two trading experiences: 7 Table of Contents • 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.
UCC Article 8 provides that financial assets held by Coinbase for its customers are not property of Coinbase and not subject to claims of our general creditors. New customers must meet some minimum criteria to engage on our platforms.
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.
Together with the crypto community, we advocate for responsible rules to make the benefits of crypto available around the world. 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.
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.
In Bermuda, we have obtained a ‘Class ‘F’ (Full) Digital Asset Business License from the BMA enabling us to service consumer trading in numerous approved jurisdictions. In addition, we have obtained Virtual Asset Service Provider registrations in Argentina, Ireland, Spain, France, Italy, the Netherlands, and the United Kingdom through which we offer crypto custody and trading services in these countries.
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.
Coinbase generates revenue from sequencer fees paid each time a transaction is processed on the Base blockchain. Coinbase Wallet Coinbase Wallet is a self-custodial wallet software product, which we offer globally. Coinbase Wallet enables users to engage and transact with the full universe of Dapps and actively engage in the onchain economy without the need for a centralized intermediary.
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.
We do not use third-party sub-custodians, where one custodian holds assets on behalf of another custodian, in connection with the storage of digital assets.
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.
Economic and trade sanctions We are required to comply with economic and trade sanctions administered by the United States, the European Union (“E.U.”), relevant E.U. member states, and other jurisdictions in which we operate.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeImportant factors that could cause us to discontinue or decrease share repurchases under the Share 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 repurchase shares under the Share Repurchase Program; and the availability of funds necessary to fulfill such repurchases.
Biggest changeImportant 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. 81 Table of Contents 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.
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 to 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.
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.
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 services.
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.
Furthermore, as we operate in multiple taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions.
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.
There can be no assurance that the Share Repurchase Program will have a positive impact on our Class A common stock price or net income (loss) per share.
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.
In addition to the factors impacting the broader cryptoeconomy 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; • 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; 24 Table of Contents • developments in mathematics and technology, including in digital computing, algebraic geometry, and quantum computing that could 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 cryptoeconomy 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 cryptoeconomy; 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.
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; 24 Table of Contents • 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.
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 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.
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.
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 banking relationships that we need to operate or prevent or delay us from obtaining additional licenses that may be required for our business.
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.
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 in the cryptoeconomy 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.
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.
The price and transaction volume of any crypto asset is subject to significant uncertainty and volatility, depending on a number of factors, including: • market conditions of, and overall sentiment towards, crypto assets and the cryptoeconomy, including, but not limited to, as a result of actions taken by or developments of other companies in the cryptoeconomy; • 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; 22 Table of Contents • 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 cryptoeconomy; • 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 cryptoeconomy participants; • regulatory or legislative changes, scrutiny and updates affecting the cryptoeconomy; • 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 cryptoeconomy; • 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 23 Table of Contents • national and international economic and political conditions.
The price and transaction volume of any crypto asset is subject to significant uncertainty and volatility, depending on a number of factors, including: 22 Table of Contents • 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; 23 Table of Contents • 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.
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 banking partners or in government money market funds or other permissible investments. We store crypto assets using proprietary technology and operational processes.
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.
As we continue to develop Base, 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 against a database of known scam code patterns.
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.
In addition, over the last several years, the Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Shifting 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.
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.
Any number of factors can negatively affect customer retention, growth, and engagement, including if: 45 Table of Contents • 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; • regulatory and governmental bodies in countries that we target for expansion express negative views towards crypto asset trading platforms and, more broadly, the cryptoeconomy; or • we or other companies or high-profile figures in our industry are the subject of adverse media reports or other negative publicity.
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; 44 Table of Contents • 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.
The CCPA requires covered companies to, among other things, provide disclosures to individuals in California, and affords such individuals new 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 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.
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 Share Repurchase Program will be fully consummated or that such program will enhance the long-term value of our Class A common stock price.
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.
We are, and may continue to be, subject to material 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 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.
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. 69 Table of Contents 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.
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. 67 Table of Contents 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.
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 prevailing tax laws.
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.
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, 2030 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.
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.
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. Tax authorities may disagree with certain positions we have taken.
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.
Moreover, laws regulating financial services, the internet, mobile technologies, crypto, 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.
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.
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 currency exchange rates.
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.
Attacks upon systems across a variety of industries, including the crypto industry, are increasing in their frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including state actors.
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.
However, these efforts to educate policymakers and advocate for sensible 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.
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.
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 accelerate operating expenditures in the future.
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.
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, 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.
Further, the IRS may issue additional guidance in the future 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.
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.
The loss of these banking partners or the imposition of operational restrictions by these banking 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.
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.
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 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 57 Table of Contents or harmful changes to the underlying smart contract.
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 55 Table of Contents 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.
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 have adopted SAB 122 as of December 31, 2024 on a retrospective basis.
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.
As a result of findings from these audits and examinations, regulators have, are, 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.
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.
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 stockholders 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, 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.
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 eliminating or replacing existing metrics.
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.
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; 26 Table of Contents • 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, is by voluntary consensus and open competition, and many developers are not directly compensated for their contributions.
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.
Due to the new and evolving 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.
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.
As another example, the extension of anti-money laundering requirements to certain crypto-related activities by the European Union’s Fifth Money Laundering Directive, as updated by the European Union’s Sixth 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.
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.
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. 58 Table of Contents 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.
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. 56 Table of Contents 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.
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 the cryptoeconomy.
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.
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 the cryptoeconomy, 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.
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.
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 banking relationships, privacy breaches, service terminations, disruptions, interruptions, and other misconduct.
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.
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 60 Table of Contents negative publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity over a short period of time.
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 58 Table of Contents negative publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity over a short period of time.
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 7 of this Annual Report on Form 10-K.
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.
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 stockholders, including our directors, executive officers, and 5% stockholders, and their respective affiliates.
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.
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 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.
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 40 Table of Contents 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.
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. 55 Table of Contents Our platform may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams.
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. 53 Table of Contents Our platform may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams.
Additionally, 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.
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.
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 banks and certain banking partners, and our business, operating results and financial condition could be adversely affected.
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.
The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our stockholders, 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.
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.
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 blockchain.
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.
We maintain complex treasury operations to manage and move customer fiat currency and crypto assets across our platforms and to comply with regulatory requirements. However, it is possible we may experience errors in fiat currency and crypto asset handling, accounting, and regulatory reporting that lead us to be out of compliance with these requirements.
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.
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, stockholders will experience dilution, and the new equity securities could have rights senior to those of our currently authorized and issued 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 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 stockholder advisory firms and large institutional investors oppose the use of multiple class structures.
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 stockholder 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.
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.
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 used to access our information technology systems and customers’ crypto assets.
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 28 Table of Contents used to access our information technology systems and customers’ crypto assets.
Any such issuance could result in substantial dilution to our existing stockholders 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.
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.
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 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.
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 64 Table of Contents 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.
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 as an L2, our business, operating results, and financial condition could be adversely affected.
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.
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, 2030 Convertible Notes, and Senior Notes, and other obligations.
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.
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 stockholders also make investments in these crypto projects. In addition, our co-founder and Chief Executive Officer, Mr.
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.
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 stockholders, 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.
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 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 customers, and licensure and compliance status.
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 25 Table of Contents customers, and licensure and compliance status.
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, 78 Table of Contents 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.
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 may face difficulty establishing or maintaining banking relationships due to instability in the global banking system, increasing regulatory uncertainty and scrutiny, or our banking partners’ policies and some prior bank partners have terminated their relationship with us or have limited access to bank services.
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.
As a result, our stockholders 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.
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.
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 stockholder rights plan, or issue other shares of preferred stock or 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.
Any exclusion from stock indices could result in less demand for our Class A common stock. Any actions or publications by stockholder 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.
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.
We rely on third parties in connection with many aspects of our business, including payment processors, banks, 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.
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.
However, if these financial institutions are subject to bank resolution or failure, or limit or end their crypto market activity, or if banking 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 cryptoeconomy, potentially leading to reduced activity on our platform which could adversely affect our business, operating results, and financial condition.
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.
If we do not effectively manage our growth, including 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.
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.
Our ability to make payments on our indebtedness, including the 2026 Convertible Notes, 2030 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.
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.
The effect of such a fork would be the 59 Table of Contents 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.
The effect of such a fork would be the 57 Table of Contents 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.
Similarly, certain of our directors, officers, employees, and large stockholders 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.
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.
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 stockholder approval.
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.
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 stockholders.
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.
Additionally, the European Union has issued 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.
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.
Adverse general economic conditions have impacted in the past, and may impact in the future, the cryptoeconomy, 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 cryptoeconomy, 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.
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.
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 38 Table of Contents applicable, of such assets, products or services.
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.
Additionally, the SEC has brought and may in the future bring enforcement actions against other cryptoeconomy participants and their product offerings and services that may cause us to modify or discontinue a product offering or service on our platform.
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 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 61 Table of Contents and force users to pay higher fees.
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 59 Table of Contents and force users to pay higher fees.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe will continue to monitor and assess our cybersecurity risk management program as well as invest in and seek to improve such systems and processes as appropriate. If we were to experience a material cybersecurity incident in the future, such incident may have a material effect, including on our operations, business strategy, operating results, or financial condition.
Biggest changeOver the past fiscal year, except as set forth herein, we have not identified any cybersecurity-related risks that have materially impacted our operations, business strategy, operating results, or financial condition. We will continue to monitor and assess our cybersecurity risk management program as well as invest in and seek to improve such systems and processes as appropriate.
The Audit Committee receives updates from the ERMWG and 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.
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.
For more information regarding cybersecurity risks that we face 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.
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.
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. 85 Table of Contents Over the past fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents we have experienced from time to time, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, operating results, or financial condition.
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.
Our CSO’s and CISO’s experience includes years of working in the cybersecurity field in various industries, including the financial services industry. 86 Table of Contents Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, including through periodic ERMWG sub-working group meetings; briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, including through periodic ERMWG meetings; briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
The Audit Committee has established the Enterprise Risk Management Working Group (“ERMWG”), comprising members of our senior management team and other senior leaders, to provide executive oversight of our enterprise risk management program.
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”).
Removed
Our Chief Security Officer (“CSO”) is a member of the ERMWG, and together with our Chief Information Security Officer (“CISO”) leads an ERMWG sub-working group related to cybersecurity, which meets periodically to review and discuss emerging and key risks relating to cybersecurity at the company, and to provide regular updates to the ERMWG.
Added
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.
Removed
Finally, our board of directors annually reviews and is required to approve our Global Information Security Program Policy and any changes recommended by our CSO.
Added
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.
Added
If we were to experience any further material cybersecurity incidents in the future, such incidents may have a material effect, including 84 Table of Contents on our operations, business strategy, operating results, or financial condition.
Added
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

Properties — owned and leased real estate

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Biggest changeWe hold all of our stockholder meetings virtually. As a result of this strategy, we do not maintain a headquarter s , but do currently lease physical offices in select major cities in the United States and other countries around the world for purposes of collaboration and team building.
Biggest changeWe hold all of our shareholder meetings virtually. As a result of this strategy, we do not maintain a headquarter s , but do currently lease physical offices in select major cities in the United States and other countries around the world for purposes of collaboration. S ee Note 13.
Added
Other 85 Table of Contents 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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn addition, we have received investigative subpoenas from the SEC and similar 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.
Biggest changeIn 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.
We intend to cooperate fully with such investigations. These examples are not exhaustive. ITEM 4. MINE SAFETY DISCLOSURES Not applicable PART II. OTHER INFORMATION
These examples are not exhaustive. ITEM 4. MINE SAFETY DISCLOSURES Not applicable PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWhere 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. 88 Table of Contents Recent Sales of Unregistered Securities None Issuer Purchases of Equity Securities We did not repurchase any shares of our Class A common stock during the three months ended December 31, 2024.
Biggest changeWhere 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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER 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.
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.
Since many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividend Policy We have never declared or paid cash dividends on our capital 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.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial 86 Table of Contents condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
The graph below compares the cumulative total return to stockholders 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, 2024 relative to the Nasdaq Composite Index, the Nasdaq U.S.
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 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.
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.
Our Class B common stock is not listed or traded on any stock exchange. 87 Table of Contents Holders of Record As of February 6, 2025, there were 263 registered holders of record of our Class A common stock and 8 registered holders of record of our Class B 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.
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.
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.
Added
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.
Added
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.
Added
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 87 Table of Contents transaction by an issuer not involving a public offering.
Added
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.
Added
All recipients of the Echo Shares either received adequate information about us or had access, through their relationships with us, to such information.
Added
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.
Added
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”).
Added
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”).
Added
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.
Added
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.
Added
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.
Added
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.
Added
(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.
Added
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] 88 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSome of these limitations are that Adjusted EBITDA excludes: • provision for (benefit from) 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; • net gains or losses on our crypto assets held for investment, net, after the adoption of ASU 2023-08; • other (income) expense, net, which represents foreign exchange gains or losses, gains or losses on strategic investments, net, gains on the repurchase of certain of our long-term debt, and other non-operating income and expense activity; • non-recurring lease charges, which represent a non-recurring fee and write-off related to an early lease termination; • non-recurring accrued legal contingencies, settlements, and related costs, which reduces cash available to us; • impairment on crypto assets still held, net, which represents impairment on crypto assets still held and is a non-cash expense, prior to the adoption of ASU 2023-08; and • the impact of restructuring, which is not related to normal operations but impacted our results in 2023. 100 Table of Contents 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.
Biggest changeSome 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.
A reconciliation is provided below for Adjusted EBITDA to Net income (loss), 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 (loss), and not to rely on any single financial measure to evaluate our business.
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.
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 of new accounting pronouncements adopted and not yet adopted as of the date of this Annual Report on Form 10-K.
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.
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, 2024, 2023, and 2022. For U.S. federal tax purposes, crypto asset transactions are treated under the same tax principles as property transactions.
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.
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, 2024.
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.
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 17.
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.
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, 2024 and 2023.
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.
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. 99 Table of Contents • 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 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.
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 108 Table of Contents liquidity, adjustments for other company-specific developments, and the rights and obligations of the securities we hold.
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.
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 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.
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 98 Table of Contents 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.
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 presented in accordance with GAAP.
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 97 Table of Contents presented in accordance with GAAP.
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.
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.
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 17.
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.
For all narrative provided in this Item 7, two numbers presented consecutively represent figures for the year ended December 31, 2024 as compared to the year ended December 31, 2023, respectively, unless otherwise noted.
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.
Operating expenses Certain prior period amounts have been reclassified to conform to current period presentation.
Operating expenses Certain prior period amounts have been reclassified to conform to the current period presentation.
If they continue, 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.
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 future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, our financial statements could be materially impacted. 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.
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. 103 Table of Contents 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.
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, 109 Table of Contents we record recoveries of these losses when it is probable that they will be collected.
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.
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.
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.
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 that our estimates and assumptions materially change or if actual circumstances differ from those in the assumptions, our financial statements could be materially impacted.
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 102 Table of Contents 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 define AOP as the total United States (“U.S.”) dollar equivalent value of USDC and crypto assets 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.
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.
As of December 31, 2024, we have not experienced excessive redemptions or withdrawals, or prolonged suspended redemptions or withdrawals, of crypto assets to date.
As of December 31, 2025, we have not experienced excessive redemptions or withdrawals, or prolonged suspended redemptions or withdrawals, of crypto assets to date.
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 on our long-term debt, including maturities and repurchases. As of December 31, 2024 and 2023 , our ratings with S&P Global Ratings were BB- for both issuer credit and senior unsecured debt.
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.
We do not use customer crypto 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. 104 Table of Contents Our business model does not expose us to liquidity risk if we have excessive redemptions or withdrawals from customers.
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 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 cryptoeconomy.
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.
Institutional customers incur lower fees per transaction than consumer customers 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.
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.
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 our valuation allowance for the years ended December 31, 2024, 2023, and 2022.
Income Taxes of the Notes to our Consolidated 104 Table of Contents 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.
See the section titled “ —Results of operations—Comparison of the years ended December 31, 2024 and 2023—Operating expenses—General and administrative ” above for discussion of material changes in legal and other contingencies during the years ended December 31, 2024 and 2023. Recent accounting pronouncements See Note 2.
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.
As a result, our crypto assets held for operations 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. See Note 5.
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.
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 related to collateral held and our obligation to return collateral.
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.
There were no material changes to note within personnel-related or other.
There were no material changes to note within employee-related or other.
Our primary uses of cash from operating activities include payments to employees for compensation, website hosting and infrastructure services, and professional services.
Our primary uses of cash in operating activities include payments to employees for compensation, marketing programs, website hosting and infrastructure services, and professional services.
For the year ended December 31, 2023, our net revenue was $2.9 billion, including $1.5 billion in transaction revenue and $1.4 billion in subscription and services revenue. For the year ended December 31, 2024, our net income was $2.6 billion and Adjusted EBITDA was $3.3 billion.
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.
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.
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.
See Note 3. Revenue 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 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.
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 c onsolidated subsidiaries.
Unless otherwise expressly stated or the context otherwise requires, references to “we,” “ou r,” “us,” “the Company,” and “Coinbase” refer to Coinbase Global, Inc. and its consolidated subsidiaries.
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.
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.
Though gross inflows and outflows of these assets were each $1.5 billion in 2024, gains 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.
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.
We anticipate satisfying our short-term cash requirements with our existing cash and cash equivalents and USDC and with future cash flows from operations and may satisfy our long-term cash requirements additionally with proceeds from a future equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders.
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, a nd potential future equity or debt financing. The sale of additional equity would result in additional dilution to our shareholders.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on February 15, 2024, which is incorporated by reference herein. 89 Table of Contents 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.
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.
Liquidity and Capital Resources We continue to believe our existing cash and cash equivalents and USDC 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.
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.
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. See Note 7.
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.
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, the number of working hours required to recreate the intangible asset (if following the cost approach), and the estimated useful lives.
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.
For example, we exclude: (i) other (income) expense, 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 (post-adoption of ASU 2023-08) because such investments are considered primarily long-term holdings, 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 based on transactions on our platform and the sales of subscriptions and services, and (iii) the impact of our restructuring in 2023, which was not related to our normal business operations. • 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) expense, net, restructurings, and benefit from or 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.
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.
Provision for (benefit from) income taxes Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Provision for (benefit from) income taxes $ 363,578 $ (171,716) $ 535,294 (312) For the year ended December 31, 2024 as compared to 2023, the increase in provision for income taxes was primarily due to higher pretax income, partially offset by tax benefits from stock-based compensation.
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.
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.
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.
Interest expense Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Interest expense $ 80,645 $ 82,766 $ (2,121) (3) There were no material changes to note within Interest expense.
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.
We review factors including changes in our 107 Table of Contents 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.
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.
The percentage of transaction revenue from trading on our platform broken down by crypto asset was as follows: Year Ended December 31, Change 2024 2023 % Bitcoin 30 % 35 % (14) Ethereum 13 17 (24) Other crypto assets (1) 57 48 19 Total 100 % 100 % ____________________________________ (1) No other crypto asset individually represented more than 10% of the total.
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.
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, 2024 2023 % MTUs (1) (in millions) 8.4 7.4 14 Assets on Platform (2) (in billions) $ 404 $ 191 112 Trading Volume (in billions) $ 1,162 $ 468 148 Net income (in millions) $ 2,579 $ 95 nm Adjusted EBITDA (3) (in millions) $ 3,348 $ 978 242 _____________ nm - not meaningful (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.
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. 89 Table of Contents 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.
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.
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.
Comparison of the years ended December 31, 2024 and 2023 Revenue For the years ended December 31, 2024 and 2023 we generated 83% and 88%, respectively, of total revenue in the U.S. No other country accounted for more than 10% of total revenue during the years presented.
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.
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.
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.
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 cryptoeconomy. AOP also represents our monetization opportunity for subscription products and services, including from the adoption and use of USDC, staking, custody, Prime Financing, and Coinbase One.
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.
Additionally, the growth in USDC balances is primarily attributable to the USDC rewards program, combined with deeper integration of USDC across our products. 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 during the period of measurement.
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.
Long-term debt On March 18, 2024, we issued $1.3 billion in aggregate principal amount of convertible senior notes that mature on April 1, 2030, unless converted, redeemed or repurchased on an earlier date. As of December 31, 2024, we held $4.3 billion in aggregate principal amount of long-term debt.
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.
Crypto assets held for investment We view our crypto asset investments as primarily long-term holdings and we do not and do not plan to engage in regular trading of these crypto assets.
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.
Financing activities Net cash provided by financing activities increased by $3.6 billion for the year ended December 31, 2024 as compared to 2023 primarily due to: • a $1.9 billion increase in customer custodial cash attributable to increased Trading Volume; 106 Table of Contents • a $1.1 billion net increase in cash due to proceeds from the issuance of our 2030 Convertible Notes less cash paid for associated capped calls; • a $303.5 million decrease in cash outflows in 2024 related to long-term debt repurchases in 2023; and • a $22.5 million net increase in recognized fiat collateral pledged by institutional customers related to Prime Financing loans.
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 101 Table of Contents • 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.
S ee the section titled “ 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. 90 Table of Contents 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.
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.
Trading Volume does not include derivatives volume on our platform or trades executed on third-party venues. Trading Volume represents the product of the quantity of assets transacted and the trade price at the time the transaction was executed.
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.
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 the section titled “ Item 7A. Quantitative and Qualitative Disclosures about Market Risk – Equity investment risk . See Note 13.
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.
General and administrative expenses increased for the year ended December 31, 2024 as compared to 2023, due to: • an increase in personnel-related expenses largely driven by increased stock-based compensation expense as a result of the 2023 annual employee equity awards being granted at a lower stock price as compared to the 2024 annual employee equity rewards; • higher professional services expenses driven by an increase of $30.0 million in legal advisory services, offset in part by lower business consulting expenses; • an increase in customer support costs as a result of increased capacity needs.
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.
Generally, Trading Volume on our platform 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 experienced correspondingly high levels of Trading Volume on our platform.
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.
Net cash provided by operating activities increased by $1.6 billion for the year ended December 31, 2024 as compared to 2023 primarily due to: • an increase in cash as a result of the $3.5 billion increase in total revenue; offset in part by • a $801.7 million increase in cash used to purchase USDC in order to facilitate growth in Prime Financing as well as to provide liquidity for normal business operations; • a $115.2 million increase in cash used for annual employee performance compensation given our strong financial performance during the prior year; • a $106.1 million increase in cash used to pay income taxes; and • an overall increase in other cash expenses as we continue to grow our business.
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.
In the first quarter of 2025, we expect technology and development and general and administrative expenses to grow modestly as compared to the fourth quarter of 2024, primarily due to headcount growth and variable infrastructure and customer support 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.
We are also required to hold corporate liquid assets at our subsidiaries to meet capital requirements established by our regulators based on the value of crypto assets held in custody. As of December 31, 2024, we were in compliance with these capital requirements.
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.
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.
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. 100 Table of Contents 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.
Investing activities Net cash used in investing activities increased by $287.8 million for the year ended December 31, 2024 as compared to 2023 due to: • an increase of $138.6 million in cash used for the origination of fiat loans, net of repayments, reflecting growth in Prime Financing and lower net cash inflows in 2024 related to the discontinuation of a retail lending program; and • $41.6 million in cash provided by net sales of crypto assets held for investment for the year ended December 31, 2024, as compared to $184.0 million in cash provided by net sales of crypto assets held prior to the adoption of ASU 2023-08 for the year ended December 31, 2023.
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.
See Note 20. Restructuring , 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. (2) 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 94 Table of Contents • an increase in website hosting and infrastructure expenses driven by initiatives to increase capacity and scalability to support activity on our platform.
Transaction expense Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Blockchain rewards fees $ 455,946 $ 229,851 $ 226,095 98 Payment processing and account verification 150,897 76,795 74,102 96 Transaction rebates and commissions 122,372 6,876 115,496 nm Transaction reversal losses 79,639 51,501 28,138 55 Blockchain transaction fees 80,926 55,467 25,459 46 Other 7,927 215 7,712 nm Total transaction expense $ 897,707 $ 420,705 $ 477,002 113 __________________ nm - not meaningful 95 Table of Contents Transaction expense increased for the year ended December 31, 2024 as compared to 2023, due to: • higher blockchain rewards fees, which rose generally in line with blockchain rewards revenue; • an increase in payment processing fees of $56.4 million, reflecting Trading Volume growth of 148%, offset in part by savings from reduced fees at higher volumes; and • higher transaction rebates and commissions, driven primarily by rebates earned by institutional customers providing liquidity on our international exchange, driven by growth in volume.
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.
In October 2024, our board of directors authorized a share repurchase program of up to $1.0 billion of our Class A common stock without expiration (the “Share Repurchase Program”).
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.
Other revenue Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Corporate interest and other income $ 270,782 $ 181,843 $ 88,939 49 Total other revenue $ 270,782 $ 181,843 $ 88,939 49 Other revenue increased for the year ended December 31, 2024 as compared to 2023, primarily due to higher average cash and cash equivalents balances.
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. 93 Table of Contents 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.
Further, personnel-related expenses increased $42.6 million due to higher average headcount; and • higher website hosting and infrastructure expenses driven by increased activity on our platform. There were no material changes to note within amortization, depreciation, and impairment or other.
There were no material changes to note within amortization, depreciation, and impairment, or other.
Crypto Assets Held for Investment 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. Customer assets and liabilities Recognized c ustomer assets and liabilities comprise customer custodial funds and corresponding customer custodial liabilities that represent our obligation to return these assets to the customers.
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.
Gains on crypto assets held for investment, net Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Gains on crypto assets held for investment, net $ (687,055) $ — $ (687,055) nm __________________ nm - not meaningful Gains on crypto assets held for investment, net during the year ended December 31, 2024 were primarily due to remeasurement of the fair value of crypto assets held, mainly reflecting increases in the prices of Bitcoin and Ethereum. 98 Table of Contents Other income, net Year Ended December 31, Change (in thousands, except %) 2024 2023 $ % Losses (gains) on strategic investments, net $ 11,553 $ (24,368) $ 35,921 (147) Gain on extinguishment of long-term debt, net — (117,383) 117,383 nm Other (40,627) (25,832) (14,795) 57 Total other income, net $ (29,074) $ (167,583) $ 138,509 (83) __________________ nm - not meaningful Other income, net changed for the year ended December 31, 2024 as compared to 2023, due to: • a decrease in gains on strategic investments, net driven by a gain of $49.9 million resulting from an equity investment transaction with Circle US Holding, Inc. during the third quarter of 2023; and • a net gain on the repurchase of certain of our 2026 Convertible Notes and certain of our Senior Notes during 2023.
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 96 Table of Contents 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.
Crypto assets held for operations We primarily receive crypto assets held for operations as payments for transaction revenue, blockchain rewards, custodial fee revenue, and other subscriptions and services revenue. Our intent is to convert crypto assets received as a form of payment to cash or to use them to fulfill expenses, primarily blockchain rewards, nearly immediately.
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.
For the year ended December 31, 2023, our net income was $0.1 billion and Adjusted EBITDA was $1.0 billion. For 2025, we believe that we are well-positioned to drive revenue growth across all macroeconomic environments, and we remain committed to advancing regulatory clarity. Despite multiple Federal Funds Rate decreases in late 2024, future interest rate decreases are not certain.
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.
MTUs increased for the year ended December 31, 2024 as compared to 2023, primarily due to a 1.3 million increase in trading users, influenced by overall crypto market sentiment and activity and higher average crypto asset prices.
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.
(2) No crypto assets other than those shown in this table individually represented more than 10% of our Trading Volume.
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.
We were in compliance with all collateral requirements as of December 31, 2024. See Note 4. 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 relating to crypto assets borrowed and borrowings.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAdjustments to the fair value of our investments are recorded in Other (income) expense, net in our Consolidated Statements of Operations. During the years ended December 31, 2024 and 2023 , we recognized immaterial impairment expense related to our strategic investments in privately held companies.
Biggest changeWe 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.
Foreign currency translation risk 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.
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.
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, 2024 and 2023, 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.
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.
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, 2024 or 2023.
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.
Equity Investment Risk 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.
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.
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 investees operate.
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 107 Table of Contents investees operate.
S ee our Consolidated Statements of Comprehensive income (loss) in Part II, Item 8 of this Annual Report on Form 10-K for translation adjustments for the years ended December 31, 2024, 2023, and 2022.
S ee 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.
Market risk on derivatives is the exposure created by potential fluctuations in market prices and other factors and is a function of the type of derivative product, the volume of transactions, the tenor and terms of the agreement, and the underlying volatility.
Market risk on derivatives is the exposure created by potential fluctuations in market prices and other factors and is a function of the 108 Table of Contents type of derivative product, the volume of transactions, the tenor and terms of the agreement, and the underlying volatility.
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, 2024 and 2023, and applied to the simple average of our gross inflows and outflows of 112 Table of Contents these assets for their weighted average period outstanding during 2024, would not have a material impact on our Consolidated Financial Statements.
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.
In addition, as of December 31, 2024, customers had pledged $178.6 million 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.
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.
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, 2024 and 2023 or during the year ended December 31, 2024. See Note 16.
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.
For more information on our derivatives, see Notes 2. Summary of Significant Accounting Policies — Derivative contracts , 4. Collateralized Arrangements and Financing , 6. Accounts Receivable, Net, 11. Derivatives, and 12. 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. 114
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. 110
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. 111 Table of Contents As of December 31, 2024 and 2023 , our strategic equity investments in privately held companies were $374.2 million and $343.0 million, respectively.
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.
The following table summarizes these Other Derivatives exposures, on a gross basis, as the receivables and payables may be unrelated (in thousands): December 31, 2024 2023 Gross Other Derivatives $ 228,712 $ 65,082 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, 2024 2023 Gains on Gross Other Derivatives (1) $ 83,269 $ 37,031 __________________ (1) Gains and losses on derivatives are recorded in our Consolidated Statements of Operations in the locations shown in Note 11.
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. (2) As of January 1, 2024, the date of our adoption of ASU 2023-08, net gains and losses after considering the associated naturally offsetting non-derivative positions are recorded in Transaction expense in the Consolidated Statements of Operations.
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.
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, 2024 2023 Gross Financing Derivatives $ 1,067,594 $ 416,988 Net Financing Positions $ — $ 73 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, 2024 2023 Losses on Gross Financing Derivatives (1) $ (114,521) $ (103,338) Losses on Net Financing Positions (2) $ — $ (5,016) __________________ (1) Gains and losses on derivatives are recorded in our Consolidated Statements of Operations in the locations shown in Note 11.
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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the risk to our f inancial 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the risk to our f inancial statements associated with the effect of changes in market factors, including risks associated with interest rates, foreign currency, derivatives, equity investments, and crypto assets.
As of December 31, 2024 and 2023, 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.
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.
A hypothetical 50% increase or decrease in crypto assets prices as of December 31, 2024 and 2023 would result in a $776.5 million and $514.0 million impact, respectively, to the value of our Crypto assets held for investment and would have, under ASU 2023-08, been recorded as a gain or loss in our Consolidated Statements of Operations.
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.
In addition to the exposures described above, we hold crypto assets for various reasons. As of December 31, 2024 , we held the following crypto assets: $1.6 billion held for investment; $261.1 million that were borrowed; $82.8 million held for operations; and $767.5 million held as collateral.
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.
These funds consist of cash deposits 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 increase or a decrease in interest rates. However, the amount of interest we earn on these balances, especially the cash equivalents, may be significantly impacted.
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 105 Table of Contents increase or a decrease in interest rates.
A hypothetical 200 basis points increase or decrease in average interest rates applied to our average month end cash equivalents balances for the years ended December 31, 2024 and 2023 , would have resulted in an impact of $165.8 million and $122.9 million, r espectively, on interest earned on these funds.
A hypothetical 150 basis points increase or decr ease 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, r espectively, on interest earned on these funds.
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, 2024 and 2023, it would not have a material impact on our financial results. Our international operations expose us to exchange rate fluctuations otherwise.
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.
Market Risk of 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.
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.
We also earn stablecoin revenue from an arrangement with Circle. Interest income is earned by Circle on USDC reserve balances held. Circle reported that, as of December 31, 2024, 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.
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.
Summary of Significant Accounting Policies — Investments and 13. 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 .
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 .
However, prior to adoption, we classified our crypto assets held according to these same categories and have utilized these balances in preparing the following disclosures. 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 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.
Prior to adoption of ASU 2023-08, net gains and losses after considering the naturally offsetting non-derivative positions were recorded in Other operating expense, net in the Consolidated Statements of Operations. 113 Table of Contents As of December 31, 2024 and 2023, 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.
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.
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. Market Risk of Derivatives We have exposure to derivatives measured and recorded at fair value.
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.
A hypothetical 200 basis points increase or decrease in average interest rates applied to daily USDC reserve balances held by Circle for the years ended December 31, 2024 and 2023, would have resulted in an impact of $387.8 million and $294.2 million, respectively, on stablecoin revenue . 110 Table of Contents Foreign Currency Risk Foreign currency transaction risk Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries.
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 .
This hypothetical 50% is calculated as discussed above under Market Risk of Crypto Assets , as the fair value of these derivatives is also derived primarily from the volatility of Bitcoin and Ethereum over a similar period.
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. 109 Table of Contents 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.
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.
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. 106 Table of Contents 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.
This activity reflects an increase of over 500 basis points, followed by a decrease of nearly 100 basis points, and as a result, we believe additional significant changes in interest rates are reasonably possible.
As a result, we believe additional changes in interest rates of this magnitude are reasonably possible.
We anticipate volatility to our net income (loss) 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.
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.
Other (Income) Expense, Net of the Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for losses on foreign exchange, net for the years ended December 31, 2024 and 2023. If an adverse 10% foreign currency exchange rate change was applied to the largest foreign currency exposure (e.g.
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.
Interest Rate Risk 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 arrangement with Circle Internet Financial (“Circle”).
These assets, liabilities, and equities are held for purpo ses other than tr ading, except for our marketable investments which are available for trading. Inte rest 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 .
Removed
The Federal Reserve has adjusted the Federal Funds Rate significantly in recent years in an effort to co ntrol inflation, raising it from a low of under 0.1% as of March 2022 to a peak of 5.33% from July 2023 to September 2024, followed by declines to arrive at 4.33% a s of December 31, 2024.
Added
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.
Removed
The gross increase between December 31, 2022 and December 31, 2024, a period which we currently deem to be a reasonable proxy for near term future changes in interest rates, was approximately 200 basis points.
Added
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.
Removed
Beginning on January 1, 2024, as a result of our adoption of ASU 2023-08, we changed how we value and present crypto assets held in our Consolidated Balance Sheets and thus there are no comparable figures reported in our Consolidated Balance Sheets as of December 31, 2023.
Added
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.
Removed
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
Foreign Currency Foreign currency transactions Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries.
Added
Gains and losses on foreign currency exchange were immaterial during the years ended December 31, 2025 and 2024.
Added
Our international operations expose us to exchange rate fluctuations otherwise.
Added
However, these assets and liabilities are short-term in nature.

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