Coinbase exceeded Wall Street analysts’ estimates for second-quarter revenue as America’s largest cryptocurrency exchange’s shares climbed higher amid the industry’s recovery from the crypto winter.
The exchange reported total revenue of $1.45 billion, slightly above the average estimate of around $1.4 billion, according to FactSet. However, its adjusted core profit $596 million fell short of the consensus estimate of $607.7 million.
Transaction fees, Coinbase’s primary revenue source, saw a decline of 27% from the previous quarter as trading volumes dropped by 28%. Even so, the exchange saw a 17% jump in subscription and services revenue compared to the last quarter. This was driven by higher average USDC balances on the platform, a rise in USDC market cap, and a boost in average crypto asset prices, especially SOL and ETH.
In a letter to shareholders, Coinbase highlighted the benefits of these factors on a quarter-over-quarter basis, noting the positive impact on subscription and services revenue.
Coinbase has been working to diversify its revenue streams. It has become a major player in the spot Bitcoin and Ether exchange-traded funds (ETFs) business, both listing some of these ETFs and serving as a custodian.
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Coinbase refutes claims of campaign finance violations
Elsewhere, Coinbase’s chief legal officer, Paul Grewal, denied allegations that the exchange violated campaign finance laws by donating $25 million to a super political action committee (PAC) in May 2024.
Crypto skeptic Molly White claims that Coinbase “appears” to have broken campaign finance laws by contributing to the Fairshake crypto super PAC while negotiating a federal government contract.
Grewal refuted these claims, stating that Coinbase was not a federal contractor under the “plain language” clause of Code of Federal Regulations 111.51. He added that the U.S. Marshals Service (USMS) did not pay Coinbase with appropriated funds, which was clarified in the public request for proposal (RFP).
“Whether intentional or not this is misinformation,” Grewal remarked.
Coinbase made several donations to the Fairshake super PAC, including $5 million in November 2023, $15.5 million in December 2023, and $25 million on May 30, 2024. White argued that these contributions occurred within the prohibited period, noting that Coinbase’s RFP was issued on March 4, 2024, and the contract was set to end “no sooner” than June 30, 2025.
In response, Grewal clarified that all funds related to the RFP were paid from the Assets Forfeiture Fund, which comprises proceeds from the sale of property forfeited to the U.S. government under the Department of Justice’s authority.
