Crypto

Coinbase Irish Branch Revenue and Profits Soared Ahead of “Crypto Winter” Start

After tax on the profits of the crypto asset exchange, the Irish arm of Coinbase jumped more than 300% to 2.7 million euros in 2021 before the crypto downturn that occurred earlier this year, causing the company’s share price to fall more than 80% so far. However, company directors warned that the numbers may not “accurately indicate future performance” due to the “highly volatile nature” of crypto assets.

New accounts for Coinbase Ireland show the company generated €64.5 million in revenue last year, a 550% increase from 2020, in line with a broader spike in the overall market of crypto, which was valued at $2.5 trillion (2.4 trillion euros) in May 2021.

But the overall market value has fallen to $763 billion this year, industry news site CoinDesk recently estimated, with bitcoin’s value falling more than 62% in the past 11 months alone. A number of top companies, most recently including Sam Bankman-Fried’s FTX exchange, collapsed during the downturn, known in the industry as the “crypto winter”.

Founded in the United States in 2012, Coinbase allows users to buy and sell crypto assets such as Bitcoin and Ethereum. It received an electronic money license from the Central Bank of Ireland in 2019, authorizing it to provide electronic payment services and manage electronic payments for third parties.

In a report attached to the accounts, the directors of Coinbase Ireland said the company was profitable in 2021 due to revenue generated from providing support services and integrating e-money to affiliated entities.

They said that while the Irish entity “does not directly own crypto assets”, its “operating results are dependent on crypto assets and the broader cryptoeconomy.” As such, the directors said that “due to the highly volatile nature” of the industry, “Coinbase’s operating results will continue to fluctuate significantly” and it is difficult for the company to accurately predict future growth trends”.

“Given the rapidly changing nature of business and the cryptoeconomy, period-to-period comparisons of our operating results may not be meaningful, and you should not rely on them as indication of future performance,” the directors said.

Coinbase employed an average of 117 people in its Dublin offices in 2021, up from 58 in 2020.

However, its parent company announced in June that it would lay off 18% of its workforce in response to the sharp drop in crypto prices and trading volumes.

In a note attached to the accounts, the company said, “The first half of 2022 continued a trend of both declining crypto asset prices and volatility that began in late 2021. Company’s operating results in 2022, but is not expected to have a material impact on the Company’s business operations or operating margin. »

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