Coinbase (NASDAQ:COIN), the only publicly traded crypto exchange, is not having a very good year. In fact, Coinbase CEO Brian Armstrong recently commented in an interview that revenue in fiscal year 2022 is expected to be half of what the exchange delivered in 2021.
The crypto ice age has claimed many victims with a blast radius that seems to be getting bigger over time as investors flee for safety and aggregate crypto valuations have declined by more than two-thirds.
Speaking with Bloomberg, Armstrong said:
“Last year in 2021, we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down, it’s looking, you know, about roughly half that or less.”
He also commented on the bankruptcy of FTX and founder and former CEO Sam Bankman-Fried, alleging the funds had been stolen from customers.
“It appears that they took customer funds from their exchange and actually commingled them or moved them into their hedge fund and then ended up in a very underwater position. And that was, I believe, against their terms of service and against the law.”
Meanwhile, enforcement drums are pounding louder, and it is just a matter of time before the SEC and CFTC announce enforcement actions. A bigger question is if the US Department of Justice will file criminal charges, as many observers believe Bankman-Fried may have committed wire fraud.
As for Coinbase, the FTX saga cannot pass soon enough as it pollutes the entire digital asset sector. And for investors in Coinbase shares, the pain is real. Coinbase shares are trading near their 52-week low – hovering around $41. The stock’s 52-week high is around $290 – probably a point when many investors wished they had sold.