Coinbase Global Inc., the largest U.S.-based cryptocurrency exchange, reported an increase in its fourth quarter 2022 earnings on Tuesday, even as overall users declined throughout the period.

See related article: Coinbase CEO says he will “happily defend” crypto staking service against claim it’s a securities product

Fast facts

  • Coinbase, the second largest crypto exchange in the world, reported US$605 million in net revenue for the quarter, beating analysts’ predictions of US$588 million.
  • The exchange’s Q4 net revenue was 75% lower than the US$2.5 billion reported in the same period the previous year, when many major cryptocurrencies were trading near their all-time highs. Coinbase earned US$2.6 billion in net income for the year 2022, down from US$3.6 billion in 2021.
  • Transaction volume on the platform fell 12% quarter-over-quarter to US$322 million. However, subscription and service revenues grew 34% to US$283 million, accounting for almost 50% of overall revenue for the quarter, mainly from interest income of US$182.2 million.
  • Coinbase earns income through charging fees on transactions, but also through providing custody of digital assets, staking and other services.
  • Part of this revenue stream could possibly be in jeopardy as the U.S. Securities and Exchange Commission recently signaled a possible crackdown on staking services by fining crypto exchange Kraken US$30 million for offering such services.
  • Coinbase chief executive Brian Armstrong has said that he believes staking to be an essential component of the crypto industry.
  • Coinbase announced in early January that it would be letting go of around 950 employees, or roughly 20% of its workforce, by the second quarter of 2023.
  • The company’s shares on the Nasdaq dropped 1.2% during after-hours trading after closing Tuesday down 4.8% at US$61.30.

See related article: Coinbase to cut 20% of its remaining workforce