Given the situation, the company intends to cut costs, and one of the measures to achieve this will be to considerably reduce the number of employees.
Coinbase, the largest US cryptocurrency exchange, lost hundreds of millions of dollars in the fourth quarter of 2022 amid the severe crisis facing the crypto sector following the collapse of the FTX exchange last November.
According to a new letter to investors published Tuesday, the company posted a net loss of $557 million for the three months ended December 31, 2022, compared to $840 million in profit for the same period of the year. above, while net losses in 2022 were $2.6 billion. The company also posted a net loss of $124 million, based on earnings before interest, taxes, amortization and depreciation, or EBITDA.
While the $629 million in revenue this period beat analysts’ median estimate of $581 million, it was about a quarter of the nearly $2.5 billion in the prior period. Thus, earnings per share was $2.46, compared to $3.32 in the last quarter of 2021.
In addition, full-year net profit was reported to be $3.1 billion, up from $7.4 billion in 2021. Total fourth-quarter transaction revenue was down 12% from the prior quarter to $322 million. Dollars: For example, institutional transaction revenue was $13 million, down 32% from the third quarter.
At the same time, total assets on the platform were down 21% qoq in Q4, “largely driven by declining crypto asset prices, which were down 16% between Sept. 30 and Dec. 31.” “. “The reduction in customer fiat balances is consistent with behavior seen during the previous down market,” Coinbase said.
Meanwhile, the company’s expenses increased. Total operating expenses in 2022 were $5.9 billion, up 24% from the prior year, and general and administrative expenses were $1.6 billion, up 76% over 2021.
In this sense, the company stressed that it ended the fourth quarter with 4,510 full-time employees, but now it intends to reduce the number of workers. The number of employees is expected to drop to around 3,650 when the measure is applied.
“As the events of 2022 unfolded, it became clear that we had hired too many people too quickly. […] We expect the reduction in headcount in January 2023 and continued cost management efforts across the board to result in a greater than 30% reduction in technology and development, sales and marketing, and general and administrative expenses for the company. first quarter of 2023 compared to the fourth quarter of 2022,” the letter reads.
Coinbase also assured that cryptocurrency policy “is in a major transition period,” as well as expecting 2023 to be an important year for crypto policy in the US and abroad. This could help cryptocurrencies reach their full “innovative potential” but could also “result in further actions by policymakers and regulators that would have a negative impact on the industry.” “We are preparing for both scenarios,” he said.
The cryptocurrency exchange giant underscored that the public conversation around cryptopolitics is receiving more attention than ever, with FTX’s collapse in November 2022 “certainly serving as a catalyst” for it. “The actions taken by some regulators in response to that crash, however, have kept the political conversation at the fore. Coinbase is concerned about those actions that seem more designed to be punitive and reactive than to address the real interests of consumers and the realities of how cryptocurrencies work,” he said.
Source: RT
