Coinbase Global, Inc. (Coinbase)operates platform for crypto assets in the United States and internationally.
The company also provides critical infrastructure for the onchain economy and supports builders who share its vision of bringing the world onchain. Onchain activities are interactions with the blockchain that take place in a broad category of blockchain-powered technologies, including self-custody wallets, decentralized apps and services, and open community engagement platforms.
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Coinbase Global, Inc. (Coinbase)operates platform for crypto assets in the United States and internationally.
The company also provides critical infrastructure for the onchain economy and supports builders who share its vision of bringing the world onchain. Onchain activities are interactions with the blockchain that take place in a broad category of blockchain-powered technologies, including self-custody wallets, decentralized apps and services, and open community engagement platforms.
Business
The company offers products and services to three customer groups:
Consumers: Retail customers seeking to invest in or trade crypto assets and engage onchain.
Institutions: Businesses that include market makers, asset managers, hedge funds, banks, wealth platforms, registered investment advisors, payment platforms, and public and private corporations.
Developers: Entrepreneurs, creators, merchants, crypto asset issuers, organizations, financial institutions, and other groups building decentralized protocols, applications, products, or other services onchain.
The company’s platform serves as a trusted and compliant on-ramp to the onchain economy and enables its users to engage in a wide variety of activities with their crypto assets in both its proprietary and third-party product experiences enabled by access to decentralized applications. The company’s business consists of products that it monetizes through transaction fees, such as its consumer trading product suite, as well as subscription products and services, such as its stablecoin products.
Transaction Products
Consumer Trading
The company’s platform is designed to serve a wide variety of consumers, whether they are buying their first crypto asset or are advanced traders. It offers two trading experiences:
Simple Trade: The company’s simple trading experience offers customers the ability to buy, sell, and convert crypto assets using the basic interface of its platform, and includes value-added services, such as fixed price quotes and recurring trades. Simple trading focuses on consumers of all experience levels who are prioritizing ease of use.
Advanced Trade: The company’s advanced trading experience offers traders access to spot and derivatives order books, real-time market information through interactive charts, a live trade history on the advanced trade view, and other trading tools. Advanced trading focuses on sophisticated traders who are prioritizing a robust set of features to meet their more complex needs and higher volume.
The company generates fees from consumers trading on its platform, including through volume-based transaction fees and a spread depending on the type of trade. Simple trading and advanced trading fees differ due to both the typical nature of the transactions and unique benefits of each offering.
Prime Trading
Coinbase Prime is the company’s full-service prime brokerage platform, where its institutional customers can access deep pools of liquidity across a network of trading venues. The company offers volume-based pricing and charges a transaction fee for executed trades.
Markets
The company provides market infrastructure in the form of trading venues for customers to trade spot and derivatives. It currently provides access to three trading venues: the Coinbase Exchange, the Coinbase International Exchange, and the Coinbase Derivatives Exchange. These markets generate revenue by charging a transaction fee for executed trades.
Base Protocol
Base is an L2 Ethereum blockchain offering fast, cheap, global onchain transactions. In 2024, Base reduced median transaction fees by more than 90% to enable sub-one cent median transactions. Base’s goal is to bring one million developers and one billion users onchain to build a global economy. Base aspires to be the best place to build applications, create content, and earn money onchain. The company 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 the company offers 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. Customers can also link their Coinbase account to their Coinbase Wallet to more easily transfer assets between the two. In 2024, the company launched ‘smart wallet,’ which is an improved self-custody technology that enables instant onboarding with no separate app or extension, and no need to memorize a seed phrase. Coinbase Wallet includes smart wallet compatibility.
Subscription Products and Other Services
Stablecoins
Stablecoins play a key role in updating the financial system and advancing economic freedom by combining the benefits of crypto rails, which are global, cheap, and fast, with an asset that is stable relative to fiat currencies. The company offers a variety of stablecoins denominated in multiple fiat currencies on its platform, and continues to explore partnerships with a number of stablecoin issuers to expand its offerings.
In 2018, the company partnered with Circle Internet Financial, LLC (‘Circle’) to launch USDC, with the goal of driving global, mainstream adoption of stablecoins. Circle and its affiliate, Circle Internet Financial Europe SAS, are the issuers of USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars, and Circle Internet Financial Europe SAS is the issuer of EURC, a stablecoin redeemable on a one-to-one basis for Euros. In August 2023, the company entered into an updated arrangement with Circle to support USDC; help drive the long-term success of the stablecoin ecosystem; and share in the economics of the reserves backing stablecoins in circulation both on and off its platform (the ‘Circle Agreement’). Pursuant to the Circle Agreement, Circle pays the company for its role in the growth of USDC: the greater the proportion of USDC in circulation generally and on its platform, the greater its revenue generated under the Circle Agreement.
In November 2024, the company and Circle entered into a supplement to the Circle Agreement, pursuant to which they will agree upon the fees that such third parties are eligible to receive and the undertakings to be required of them upon becoming an approved participant.
In 2024, the company began paying rewards onchain to customers holding USDC balances in Coinbase Wallet.
Staking
Staking is one of the company’s most popular services. 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.
The company provides an onchain staking service, which allows its customers to stake their assets with a few clicks. Its customers maintain full ownership of their crypto assets while earning staking rewards. Customers who stake their assets receive compensation, 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 it provides, the company earns a fixed percentage commission on all staking rewards received.
Because staking rewards depend on the relevant protocol and network conditions, the estimated rewards rate for each asset made available for staking is displayed on the company’s website and through its platform, and is calculated by periodically consulting onchain data to determine the total amount. The company only facilitates staking of a consumer’s crypto assets in response to a direct instruction from that consumer, and the staked crypto assets remain the property of the consumer and in its custody while staked.
Subject to jurisdiction, the company supports eight staking assets through its 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).
For its institutional customers, the company’s staking process varies by customer. In addition to operating its own validator nodes to provide staking services, it utilizes third-party service providers to operate validator nodes on its customers’ behalf.
The company also operates a cbETH token wrapping service. cbETH is an Ethereum-based ‘wrapped staking token’ that represents ownership of ETH staked through its platform. Eligible customers can obtain cbETH tokens by wrapping their staked ETH or by purchasing cbETH tokens on its 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. Selling or otherwise transferring cbETH automatically transfers ownership of the underlying staked ETH, along with any rewards earned.
Custody
The company offers an institutional-grade custody platform with a highly secure cold storage solution both within the United States and globally. It charges institutions a separate fee based on the total assets stored in custody on its platform. For example, it serves as a custodian for several Bitcoin and Ethereum ETF issuers. In 2024, the Securities and Exchange Commission (the ‘SEC’) approved 11 spot Bitcoin ETF applications, nine of which partner with the company, and nine Ethereum ETF applications, eight of which partner with it.
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 subscriber, priority customer service support, and offers from third-party partners. In 2024, the company launched an additional subscription tier, Coinbase One Premium, offering consumers enhanced benefits, including unlimited zero trading fees on simple trading and concierge support for a higher subscription fee.
Institutional Financing
Financing is an increasingly important offering to the company’s institutional customers. It offers integrated financing products and services to institutional customers that meet its credit criteria to access liquidity for their hedging, trading, and working capital needs.
The company’s lending product set includes tools to allow clients to trade in real time, products that enable leverage and short access across its Prime and Markets offerings, and structured loans supporting client working capital and other needs.
In addition to lending, the company borrows fiat and crypto assets, including USDC, from third parties, including eligible institutional customers, to facilitate its financing products. It also offers a managed lending product for eligible institutional customers under its Agency Lending offering.
Coinbase Developer Platform
The company’s developer platform combines a suite of developer tools to enable crypto developers to build in the onchain ecosystem. It offers APIs to simplify a variety of key activities, including crypto payments and trading, data access, staking, and more. The Coinbase Developer Platform enables developers to build crypto into their products faster and to simplify how they interact with blockchains.
Government Regulation
The company is subject to various anti-money laundering and counter-terrorist financing laws, including the Bank Secrecy Act (the ‘BSA’) in the United States, and similar laws and regulations abroad. In the United States, as a money services business registered with the Financial Crimes Enforcement Network (‘FinCEN’), the company is 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 its customers.
The company’s compliance program is designed to prevent and detect instances of money laundering, terrorist financing, and other illicit activity on its 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.
The company’s subsidiary, CCTC, operates as a New York State-chartered limited purpose trust company, which is subject to regulation, examination, and supervision by the NYDFS. NYDFS regulations impose various compliance requirements, including, without limitation, operational limitations related to the nature of crypto assets it can hold under custody, capital requirements, BSA and anti-money laundering program requirements, affiliate transaction limitations, and notice and reporting requirements.
The company is 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 it operates. 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.
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 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. The company is subject to such authority with respect to improper trading on its platform. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products, and certain retail leveraged commodity transactions involving crypto assets, including the markets on which these products trade.
In August 2023, the company’s 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, it acquired LMX Labs, LLC, a designated contract market (‘DCM’) regulated by the CFTC, which now operates as the Coinbase Derivatives Exchange, in connection with its acquisition of FairXchange, Inc. FCMs and DCMs are subject to the rules of the National Futures Association, as well as numerous regulatory requirements, including strict capital requirements.
The company is 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. Some of these laws, such as the Bribery Act, also prohibit improper payments between private entities and persons.
The Federal Trade Commission (‘FTC’), the Consumer Financial Protection Bureau (‘CFPB’), and other U.S. federal, state, and local and foreign regulatory agencies regulate financial products, including money transfer services related to remittance or peer-to-peer transfers. These agencies, as well as certain other governmental bodies, including state attorneys general, have broad consumer protection mandates and discretion in enforcing consumer protection laws, including matters related to unfair or deceptive, and, in the case of the CFPB, abusive acts or practices (‘UDAAPs’), and they promulgate, interpret, and enforce rules and regulations that affect the company’s business.
The company, as well as the bank that issues its 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.
Intellectual Property
Coinbase, the Coinbase logo, and other registered or common law trade names, trademarks, or service marks of the company.
History
Coinbase Global, Inc. was founded in 2012. The company was incorporated in 2014.
