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Coinbase Global Inc. is preparing vigorously to face regulatory scrutiny from the Gary Gensler lead SEC. The publicly-traded company revealed Wednesday that it has managed to amass $4 billion in cash reserves as part of an effort to keep things running smoothly and streamline its services for consumers around the world.
A recent surge in transactions and retail investors has expanded Coinbase’s profits. The company generated a revenue of $2.23 billion in Q2 denoting an upsurge of nearly 1098% Y/Y from the first-quarter earnings. Retail Monthly Transacting Users rose 44% to 8.8 million over the same period.
Coinbase Approach to Regulatory Scrutiny
Amidst the increasing efforts by the authorities to regulate the crypto space, many exchanges, and crypto service provider firms have fallen prey to SEC and other regulatory bodies. But, Coinbase seems to have overcome the bulk of the scrutinies hurled at it by the market regulator.
According to reports, Coinbase has bagged benefits worth nearly $4 billion from trading frenzies which would be deployed for the company’s growth and would act as a preparatory measure against strict regulatory regimes, cyber-attacks or potential trading declines. To which Alesia Haas, the Chief Financial Officer at Coinbase said,
“We need to ensure that we maintain sufficient and extra cash reserves for smooth groundwork and growth of our products and services.”
Recently, Gensler, said that he will regulate the crypto marketplace as best as possible. As per Haas, Coinbase is paying close attention to Gensler’s statement, and the firm believes “regulation is a realization factor, not a burden.”
Coinbase will face new tax filing requirements under the proposed infrastructure bill. The bill obliges crypto exchanges to record customer’s transaction profits with the Internal Revenue Service. Haas proclaimed that Coinbase has many systems to comply with this measure, and does not expect compliance costs to be significant.
Until now Coinbase appears to be taking a strong stand in the face of regulatory scrutiny. Moreover, having cash reserves will enable the firm to take advantage of new investment opportunities while also preparing for risks down the road.
Besides this, Coinbase Q2 earnings exceeded all the expectations and marked itself as the strongest quarter for the market giant.
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