Coinbase CEO Affirms Not Quitting US Market Despite Legal Uncertainty

Key Points:

• Coinbase CEO Brian Armstrong assured shareholders he is still 100% committed to the US market despite the unclear regulatory framework.
• The company posted a loss of $79 million, much lower than the $430 million it lost in the same period last year.
• The legal battle between the exchange and the SEC is still ongoing.

Coinbase, a cryptocurrency exchange created in the United States, has yet to relocate its operations outside of the country, CEO Brian Armstrong told investors during a Q1 earnings call.

Despite US regulatory uncertainty, Armstrong assured shareholders the company was “100% committed” to the US market in the long run.

“So let me be clear, we’re 100% committed to the US I founded this company in the United States because I saw that rule of law prevails here. That’s really important, and I’m actually really optimistic on the US get this right.”

While the company is heavily focused on its international expansion, including in Canada, Brazil, and Singapore, its US operations remain its core business, the exchange said.

In comparison to the $430 million it lost during the same time the previous year, the corporation reported a loss of $79 million. There is a $0.34 loss per share on the net.

The much smaller-than-expected loss was largely due to cost-cutting, layoffs, and diversifying its revenue streams, sending its shares up 7% in extended trading on Thursday.

Earlier this year, the company said it would cut another 950 jobs in its third round of layoffs since last year. Its chief financial officer, Alesia Haas, said the improved cost structure would help the company meet its 2023 goal of improving core profitability year-over-year. The company reduced operating expenses by 24% from the previous quarter and reported expenses of $607 million, much lower than the previous levels of $625 million to $675 million.

Aside from the net revenue results, Coinbase is mired in a legal quagmire with threats of SEC enforcement action and various lawsuits lurking. Chief Legal Officer Paul Grewal said the legal battle with the SEC could be lengthy, but the company hopes to be fully operational for the time being.

This week, the company announced discontinuing Coinbase Borrow services as of May 10. But it did not clarify whether this was due to regulatory pressure. Coinbase also faced a lawsuit this week in which executives were accused of dumping millions of shares to avoid losses due to insider trading.

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