We are seeing Coinbase choose to fight the SEC so hard because staking accounts for a near a full 25% of their revenue
2 min read
If you’re out of the loop, we have seen recently seen the SEC go after many exchanges over their “Earn” or staking rewards programs. Many have been fined and settled with the SEC, but Coinbase choose to fight tooth and nail with the SEC, resisting them at every step.
The SEC has accused Coinbase of offering securities on their platform, mainly the Staking Rewards programme and has issued them a Wells Notice, which is typically a final step before legal action. However, we have seen Coinbase push right back and say they are “happy” to fight the case in court. But there’s always a story behind the headlines.
Taking a look at Coinbases 2022 Q4 financial report we can view a very simple breakdown of their revenue:
As we can see here, under “Subscription and services revenue”, Coinbase staking products brings in a significant portion of near a full 25% of Coinbase’s revenue. This 25% does also include thing like Coinbase One where you pay a subscription instead of pay monthly fees, but the vast majority of the 25% is from staking. as the company specifically outlines multiple times that “interest-bearing income” is a significant and still-growing factor of the subscription and services revenue.. Here we can see why it would be so disastrous for Coinbase to lose their staking offerings. And it is fairly uncommon for staking to be so high a generator of revenue for crypto firms which is why Coinbase have been the one to stand and resist so hard, as other firms simply don’t lose out on all that much.
submitted by /u/OneThatNoseOne
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