Coinbase, a leading cryptocurrency exchange, has experienced a substantial net outflow of multi-chain assets (excluding Bitcoin) over the past seven days. The total outflow has exceeded a staggering $1.616 billion, according to data compiled by Nansen, a blockchain analytics platform.
Of particular interest is the revelation that a significant portion of this outflow is attributed to Coinbase Custody, the platform’s specialized service for institutional investors. Coinbase Custody alone accounted for a net outflow of $1.175 billion during the same period. These figures have sparked speculation within the cryptocurrency community regarding the nature of these transactions.
Coinbase Q2 Trading Revenue Declines
Not just this, the company recently unveiled its Q2 earnings report, revealing a narrower loss and surpassing revenue projections. Despite a 12% decline in sales compared to last year’s period, totaling $707.9 million, the figure still outstripped analysts’ expectations of $631.2 million, as per Bloomberg’s survey data.
Notably, the net loss experienced a significant drop, reaching $97.4 million—well below the anticipated $172.9 million and a remarkable improvement from the $1.1 billion loss recorded in the previous year.
While transaction revenue encountered a decline of 50%, plummeting to $327 million from over $655 million in the previous year. This slide was attributed to reduced trading volume on the exchange, which sank from $217 billion to $92 billion YoY, even with a resurgence in cryptocurrency prices.
Coinbase also faced challenges in its interest income, which diminished to $201.4 million from $240.8 million, linked to a $15 billion dip in USDC market value throughout the quarter.
Amid these financial developments, the company’s legal battle with the Securities and Exchange Commission (SEC) took a noteworthy turn. The SEC filed a lawsuit against Coinbase in June, alleging breaches of federal securities regulations, specifically involving 13 tokens the agency deemed as securities. Coinbase countered by asserting that the SEC had wrongly interpreted the nature of the transactions occurring on its platform.
In a statement provided, the exchange defended its position, contending that its operations did not involve investment contracts. The statement emphasized that the digital tokens traded on Coinbase’s platform were commodities, with obligations fulfilled immediately upon token delivery.
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