A message from Coinbase CEO and Cofounder, Brian Armstrong

June 14, 2022 Coinbase

coinbase

By Brian Armstrong, CEO and Cofounder

Earlier today, I shared the following note with all Coinbase employees.

Team,

Today I am making the difficult decision to reduce the size of our team by about 18%, to ensure we stay healthy during this economic downturn. I want to walk you through why I am making this decision below, but first I want to start by taking accountability for how we got here. I am the CEO, and the buck stops with me.

What has changed?

Over the past month, I’ve had many conversations with our Exec team and our Board to discuss recent market events as well as the state of our business. Several realities have become clear to me in these discussions:

Economic conditions are changing rapidly: We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.
Managing our costs is critical in down markets: Coinbase has survived through four major crypto winters, and we’ve created long term success by carefully managing our spending through every down period. Down markets are challenging to navigate and require a different mindset.
We grew too quickly: At the beginning of 2021, we had 1,250 employees. At the time, we were in the early innings of the bull run and adoption of crypto products was exploding. There were new use cases enabled by crypto getting traction practically every week. We saw the opportunities but we needed to massively scale our team to be positioned to compete in a broad array of bets. It’s challenging to grow at just the right pace given the scale of our growth (~200% y/y since the beginning of 2021). While we tried our best to get this just right, in this case it is now clear to me that we over-hired.

What decision was reached?

The need to manage expenses: As we operate in this highly uncertain period in the world, we want to ensure we can successfully navigate a prolonged downturn. Our team has grown very quickly (>4x in the past 18 months) and our employee costs are too high to effectively manage this uncertain market. The actions we are taking today will allow us to more confidently manage through this period even if it is severely prolonged.
The need to increase efficiency: We have now exceeded the limit of how many new employees we can integrate while growing our productivity. For the past few months, adding new employees has made us less efficient, not more. We have seen ourselves slow down considerably due to coordination headwinds, and difficulty fully integrating new team members. We believe the targeted resourcing changes we are making today will allow our organization to become more efficient.

Both of these come back to my decision to significantly scale our team over the past two years, so this accountability rests fully with me.

Who is affected?

Our senior leaders have worked diligently to identify the appropriate changes for each of their teams based on our clarified priorities.

In the next hour every employee will receive an email from HR informing if you are affected or unaffected by this layoff. Every affected employee will receive an invitation to have a direct conversation with your HRBP and the senior leader of your organization.

If you are affected, you will receive this notification in your personal email, because we made the decision to cut access to Coinbase systems for affected employees. I realize that removal of access will feel sudden and unexpected, and this is not the experience I wanted for you. Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves.

I also wanted to make sure that all affected employees are taken care of in this transition, and that we support them in finding a new role. Employees who are departing today will receive:

Minimum of 14 weeks of severance plus an additional 2 weeks for every year of employment beyond 1 year
4 months of COBRA health insurance in the US, and 4 months of mental health support globally
Access to Talent Hub, where members of Coinbase’s team will work to connect with you with open positions at other firms (including portfolio companies from Coinbase Ventures and other top crypto VC funds)

Coinbase employees are among the most talented in the world, and I am certain that the skills you all possess will continue to be sought after by companies around the world. I realize it may take longer in this environment to find new employment, and so my hope is that this financial and non-financial assistance helps make this unexpected transition for you as seamless as possible.

How do we move forward?

To our colleagues who are departing, I want to say thank you for giving everything to this company, and that I am sorry. I hope that as we grow again we get a chance to hire you back. We would not be where we are today without your hard work and dedication to our mission. I am incredibly grateful for everything you have done to contribute to our success.

To our team that is staying, I know this will be a difficult day for you all too. You will say goodbye to your colleagues that you’ve been in the trenches with. I also expect you will all feel some level of fear, uncertainty and doubt about the future. Know that we made these hard decisions to ensure our future is bright. We’ll share more on how we rally as a team in the next few days. Right now, let us thank all our colleagues who are departing for the important contribution they’ve made to our mission.

Brian

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This blog post contains forward looking statements. These forward looking statements are only predictions and may differ materially from actual results due to a variety of factors. The risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in our filings with the Securities and Exchange Commission. Any forward looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this blog post. We undertake no obligation to update these statements as a result of new information or future events.

A message from Coinbase CEO and Cofounder, Brian Armstrong was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Olá from Brazil

June 10, 2022 Coinbase

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Tl;dr: A quick update about a key priority market from the International team. As we prepare to launch in Brazil, we have hired a Country Director, are building out an engineering team, and have engaged with regulators, financial institutions, and startup founders.

By Nana Murugesan,VP Business Development and International & Fabio Plein, Country Director for Brazil

At Coinbase, our goal is to promote economic freedom, and we believe the best way to do that is to get more people using crypto. That’s why it’s so important for us to expand internationally, and to make it easier for people around the world to join the crypto community.

As I shared in Lighting Up The Map: How Coinbase Plans To Scale Globally, we have adopted a go-broad and go-deep approach to further our mission around the world. Brazil is a go-deep priority market for us, which is why we’ve hired our new Country Director, Fabio Plein, to lead our work as we prepare to launch here.

Earlier this week, Fabio and I had the privilege to speak at the Valor Capital Crypto Conference about the opportunities for crypto in Brazil, as well as the importance of smart regulation, and our commitment to the Brazilian market. Valor Capital is a cross-border (US and Brazil) venture capital firm, founded by former US Ambassador to Brazil Clifford Sobel and Scott Sobel. Clifford and Scott were early investors in Coinbase, and have been immensely helpful in sharing their connections and expertise.

We believe the potential of crypto in Brazil is enormous. Crypto networks are open, allowing everyone to transact on shared networks, no matter where they live. That’s why crypto and web3 have the potential to change the way the world does business — from improving payments, to empowering microfinance projects, to providing a hedge against inflation, and access to capital.

Brazil is well positioned to lead Latin America and beyond with its approach to crypto. We are excited to see that Brazilian Central Bank Governor Roberto Campos Neto has launched dedicated policy initiatives related to blockchain, digital assets, and other innovations shaping the future of finance. And we want to support the kind of practical, thoughtful and clear regulation that will keep people safe without stifling innovation. That’s why we will keep listening and learning from regulators and policymakers’ priorities and concerns while at the same time collaborating on building a trusted and resilient crypto ecosystem. We want to be a constructive resource to the Brazilian government as they formulate a long-term strategy for how to build the cryptoeconomy.

We are building for Brazil from Brazil. So far, we have hired more than 40 full time engineers in Brazil. We offer all of the assets on the Coinbase Exchange for purchase via credit card payment. Brazilians can also take advantage of staking and use Coinbase Wallet.

We are also investing in the local startup ecosystem. Through Coinbase Ventures, we have invested in local companies, including Hashdex, a Brazilian crypto asset management firm and Bitso, a leading crypto exchange across Mexico, Argentina, and Brazil.

Brazil has always been open to financial innovation — while also laying the groundwork for clear and tailored regulation. We see Brazil as a key market for Coinbase’s entry into Latin America, and are thrilled to continue investing and building here.

Obrigado,
Nana & Fabio

Olá from Brazil was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Connecting great talent with new opportunities: Introducing the Coinbase Talent Hub

June 7, 2022 Coinbase

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By L.J Brock, Chief People Officer

As part of our announcement on Thursday, we made the difficult decision to rescind the offers of a number of candidates who were set to join Coinbase.

While it’s necessary to slow our headcount growth in light of the macro environment, we deeply regret the impact this has for the affected candidates. This decision is not a reflection of our regard for their exceptional talent or the incredible contributions we believe they would have brought to our team.

We have an opportunity now to demonstrate our culture in how we respond next. We are committed to helping these exceptionally talented individuals in the next stage of their careers.

Introducing Coinbase Talent Hub

Coinbase Talent Hub is a talent directory which utilizes Coinbase’s reputation and extensive industry network, to connect individuals with their next great role. The hub is a publicly available webpage that companies, VCs and recruiters can access to tap into top talent who have been impacted by last week’s announcement. Our goal is to make this directory highly discoverable and ultimately create the greatest value and level of choice for every individual as they transition to new employment.

If you are hiring, visit Coinbase Talent Hub to:

Discover exceptionally talented individuals, and/or;
Post your open roles using this submission form.

My goal is that through Coinbase Talent Hub and the additional talent support we have made available, we are able to help ease everyone’s transition to their next role. There are already 250+ job postings listed from more than 50 companies, and we expect that to continue to grow given the interest and outreach we’ve already seen. We aim to help create a career-defining moment for these folks — just not the one we had originally intended to.

Visit coinbase.com/talenthub.

Connecting great talent with new opportunities: Introducing the Coinbase Talent Hub was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Update on Hiring Plans

June 2, 2022 Coinbase

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By L.J Brock, Chief People Officer

I shared an update with our employees today that I want to also share publicly here.

TL;DR: In response to the current market conditions and ongoing business prioritization efforts, we will extend our hiring pause for both new and backfill roles for the foreseeable future and rescind a number of accepted offers.

Two weeks ago, we paused hiring while we took time to reprioritize our hiring needs against our highest-priority business goals. As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth. Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.

How we’ll navigate this moment:

We will extend our hiring pause for the foreseeable future.

After assessing our business priorities, current headcount, and open roles, we have decided to pause hiring for as long as this macro environment requires.
The extended hiring pause will include backfills, except for roles that are necessary to meet the high standards we set for security and compliance, or to support other mission-critical work. We will always prioritize the safety and security of our customers’ funds.

2. We will rescind a number of accepted offers.

We will also rescind a number of outstanding offers for people who have not started yet. This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas.
Limited exceptions apply and will be managed by the same criteria as backfills.
All incoming hires will be advised of their updated offer status today by email.

3. We acknowledge and take responsibility for the experience of those impacted.

This decision is not a reflection on the highly talented people we had extended job offers to.
We will apply our generous severance philosophy to offset the financial impact of this decision.
To further support impacted individuals, we are establishing a talent hub to allow them to opt-in to receive additional support services including job placement support, resume review, interview coaching and access to our strong industry connections.

We have prepared an FAQ — targeted to hiring managers and our talent teams — that contains additional information on how we’re managing this process.

As we manage through this downturn, we want to be transparent about the decisions we have to make in order to meaningfully manage expenses. For example, on our Q1 earnings call, we discussed that headcount and a variety of other expenses are the key ways for us to manage our costs. While we did not make this decision lightly, it is the prudent one given market conditions. We will continue to evaluate all of our options to responsibly navigate Coinbase through the current cycle.

We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways. If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side. These challenges can be career-defining, helping us learn and grow. And at the end of the day, I think you’ll be proud to have helped Coinbase navigate this next part of its journey.

L.J.

Forward-Looking Statements

Update on Hiring Plans was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Setting the record straight: Your funds are safe at Coinbase — and always will be

June 1, 2022 Coinbase

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Setting the record straight: Your funds are safe at Coinbase — and always will be

By Paul Grewal, Chief Legal Officer

A couple of weeks ago, a newly required SEC disclosure we made in our 10Q created some noise about how Coinbase holds crypto assets and what could happen in the highly unlikely event of the company’s insolvency. This led to some genuine concern among people who hold crypto assets on Coinbase.

Even though customer assets have always been protected, we know this was scary — especially in a down market. We want to share how we’re keeping your assets safe today and in the future:

Your funds are your funds, and your crypto is your crypto: Coinbase maintains internal systems, like a bank or a broker. Our fully audited ledger identifies your account, your fiat and crypto holdings, and tracks your account activity in real time. There’s never a situation where customer funds could be confused with corporate assets.
We will never repurpose your funds: We do not lend or take any action with your assets, unless you specifically instruct us to. Many banks and financial institutions use customer funds for commercial purposes including lending and trading, meaning that they often hold only a fraction of their customer assets at any given time. Coinbase always holds customer assets 1:1. This means that funds are available to our customers 24 hours a day, 7 days a week, 365 days of the year.
We have clarified our Retail User Agreement: We have always protected our customer funds both legally and physically. We also recently updated our Retail User Agreement to expressly highlight the applicability of UCC Article 8 — the same legal protection that our institutional clients also rely on to protect their assets in the event of a custodian bankruptcy. This is not a change in how we do business. We believe that digital assets in our custody have always been Article 8 financial assets, but have clarified this so that there will not be any doubt.

We hope that the clarifications above provide you — our customer — with confidence and clarity. We apologize for the confusion around the disclosure. Even though it was in response to guidance applicable to any publicly traded crypto custodian from an important regulator, it caused unnecessary uncertainty and anxiety.

The crypto space is a dynamic one, and we will always seek to use the best structures to ensure that our clients’ assets are managed in the safest way possible.

One final big-picture note

As Brian shared with our teams a couple weeks ago, volatility in crypto — or any market — is inevitable. We can’t control it, but we do plan for it. That’s why, through the ups and downs of crypto over the last 10 years, Coinbase has focused on building — scaling through the highs and innovating through the lows.

Nothing about Coinbase has changed. If anything, we’re in an even stronger position than we were a few months, or a year ago — and we’ll keep working to be the simplest, most trusted way for people to get involved in crypto. #Longlivecrypto

Setting the record straight: Your funds are safe at Coinbase — and always will be was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Building a more open financial System: How Coinbase detects bad actors

May 19, 2022 Coinbase

Blockchain Analytics

By Paul Grewal, Chief Legal Officer

Tl;dr: At Coinbase, we take our responsibility to build a more open, accessible financial system very seriously. We’re deeply committed to our asset listing policies and processes, and we’ll continue to innovate as our dynamic space evolves.

A few weeks ago, we shared concerns about purchases of certain assets right before we announced they were being considered for listing on Coinbase — possibly using insider information. We take this issue very seriously and therefore wanted to share more about our efforts in this space.

The blockchain fundamentally drives greater transparency in financial transactions

First, it’s important to understand that tracking and disrupting bad actors using crypto is far more effective than if they were using traditional fiat currencies. This isn’t to say that it’s easy, but we do have an advantage because crypto transactions are recorded on a permanent and public blockchain, which gives our investigation teams — along with the public and law enforcement — visibility into the details of different transactions. With crypto, it’s possible to trace and map transactions across users and exchanges — creating a fuller picture of what happened with any given trade, and making it easier to identify things that look like possible market manipulation or trades using material nonpublic information.

We have an exceptional team dedicated to preventing and identifying financial crimes

We have more than a decade of experience tracking and disrupting illegal activity, and have built expert teams to support these efforts along the way, including many with substantial experience in the public and private sector. In addition to our Security, Trade Surveillance, Global Investigations, and Special Investigations teams, we have a dedicated Financial Crimes Legal team. This team is led and staffed by multiple former federal criminal prosecutors and overseen by a former federal judge. Many of these former prosecutors have been part of some of the largest cryptocurrency cases in history, and are charged with making sure we’re doing everything we can to detect and disrupt bad actors.

Frontrunning can happen through technical or human means

Technical

The primary way we’ve seen information about possible asset listings become public before any announcement is through technical signals. For example, sometimes before onboarding an asset, we have to test it in ways that show up on the blockchain. These signals are not obvious to most, but are nevertheless accessible to all and may be detected if someone is looking hard enough for it, by examining on-chain data. That’s why we take steps to minimize this type of risk, including:

Announcing planned asset launches once a decision has been made to list an asset, but before key technical integration work begins, so everyone has access to the same information.
Exploring new ways of integrating and testing asset launches (including off-chain sandbox testing).
Building and deploying industry-first analysis tools to test our systems using a wide range of techniques based on observed real-world behavior.
Using a variety of best-in-class security tools to monitor and control access to sensitive listing information.

Human Sharing/Frontrunning

Information can obviously get out when people share it. Coinbase has gone above and beyond what a traditional financial institution can do to track and address this kind of bad behavior:

Our Trade Surveillance and other teams leverage the public blockchain to detect prohibited or suspicious transactions and then trace those funds across wallets, users, and exchanges (in a way traditional finance can’t) to see who profited and understand their connections.
We mandate that all employees trade crypto only on Coinbase’s trading platforms (where the asset is supported) so we can look out for prohibited trading activities.

In addition to Trade Surveillance, we also have more than 50 employees across various teams supporting the detection and prevention of illicit activity and misconduct, both on our platform and within the broader crypto ecosystem.

As we’ve stated multiple times, if an investigation finds that a Coinbase employee was involved in misuse of company information related to asset listings, we will not hesitate to terminate them — and, when appropriate, refer them to relevant law enforcement authorities.

We measure impact to drive accountability

It takes time to notice the effect of some of these changes, but we’re already seeing positive early indications of their impact on new asset launches.

Conclusion

To us, success is all market participants trading on the same information. That’s our goal. Crypto is a dynamic environment, so we are continually looking for additional ways to protect the confidentiality of information about our asset listings.

That’s why steps like these are so important. And while there’s always more work to do, I’m confident that we have the teams, resources, and experience to make Coinbase the most innovative and trusted way for people everywhere to access the cryptoeconomy.

Building a more open financial System: How Coinbase detects bad actors was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Introducing the Coinbase Institute: Advancing the policy debate around crypto and the future of…

May 18, 2022 Coinbase

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Introducing the Coinbase Institute: Advancing the policy debate around crypto and the future of web3

By: Hermine Wong, Director of the Coinbase Institute

Tl;dr: Today signals the launch of the Coinbase Institute, a global crypto-native think tank. Our mission is to accelerate rigorous, novel research, and to bring together the best minds across disciplines to fuel progress on decentralization, web3, and the future of finance.

Today, we’re launching the Coinbase Institute — a global crypto-native think tank grounded in evidence-based research. Our mission is to accelerate rigorous, novel research, and to bring together the best minds across disciplines to fuel progress on decentralization, web3, and the future of finance. Our work will cut across many disciplines and provide expert analysis and insights about what’s happening in the global cryptoeconomy.

The Coinbase Institute’s mission will be anchored around four core pillars of work:

Conducting and publishing rigorous, cutting-edge crypto & web3 research;
Convening collaborative discussions with thought leaders, academics, policymakers, and the crypto community;
Forging partnerships with academic institutions and think tanks to accelerate early-stage research and technical innovation;
Building an interdisciplinary in-house team to advance public knowledge and awareness of crypto and web3.

What’s launching today?

Our Coinbase Primers series, starting with Crypto and the Climate. Our primers are designed to unpack high-profile concepts around crypto and web3. News in this space moves quickly — it can be challenging to understand the technology and data underlying the headlines. Our primers will break through the noise to provide clear explanations of key issues along with the latest numbers and analysis.
Our first Coinbase Institute Monthly Insights Report on digital asset markets. This month, we focus on providing a real-time comparative analysis of market movements in the cryptoeconomy and traditional finance. Each month, we’ll provide real-time trends and insights on particular themes of the cryptoeconomy, and over time, we will return to these themes to reflect the changing nature of the issues we cover.
Our first academic partnership with the University of Michigan, with whom we will kick off the first comprehensive annual survey of U.S. households’ adoption of and sentiments toward crypto. The University of Michigan Survey Research Center conducts some of the most widely cited and influential studies in the world, including survey work for the U.S. Census Bureau and the Department of Defense.

Leadership & Advisory Board

Our Leadership Team:

Hermine Wong is the Director of the Coinbase Institute and a Director of Policy at Coinbase. Previously, Hermine served in the U.S. Securities and Exchange Commission at their Division of Economic and Risk Analysis. She also worked at the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President, and at the U.S. Department of State.
Dr. Cesare Fracassi joins us as our first Director of Economic Research and Chief Economist of the Coinbase Institute. Cesare is also a member of the State of Texas Work Group on Blockchain Matters. Before joining Coinbase, he was an associate professor of finance at the McCombs School of Business at the University of Texas at Austin, where he was the Director of the Blockchain Initiative and the Fintech Research Lab.

Our Advisory Board:

Christian Catalini, founder of the MIT Cryptoeconomics Lab, Research Scientist at the MIT Sloan School, and co-creator of Diem (formerly Libra). His research focuses on crypto and blockchain technology.
Marco Di Maggio, faculty member in the Finance Unit at Harvard Business School and a faculty research fellow at the National Bureau of Economic Research. His research focuses on financial intermediation, with a particular interest in the disruption of financial markets by new technologies.
Vikramaditya S. Khanna, Professor of Law at the University of Michigan William W. Cook Law School and Research Member of the European Corporate Governance Institute. His research includes corporate and securities laws, global business and law practice, law and technology, and law and economics.
Nagpurnanand Prabhala, Francis J. Carey, Jr. Endowed Professor in Business and Professor of Finance at the Johns Hopkins University Carey School of Business. His primary research interests are in empirical corporate finance and financial intermediation.
Manju Puri, J.B. Fuqua Professor of Finance at the Duke University Fuqua School of Business. She is an authority in the field of empirical corporate finance, with particular expertise in financial intermediation.

What’s next?

We’re still at the early stages of the cryptoeconomy’s evolution, and it’s here to stay. In the future, the Coinbase Institute plans to publish more original research papers and to convene thoughtful discussions around our four pillars. Despite the recent market noise, comprehensive data and analysis about crypto’s adoption over time will provide the public, policymakers, regulators, and academics with a better understanding of crypto’s diversity and interconnection to the overall economy.

In the meantime, do you have feedback on our work or new topics to suggest? Visit us at our website to join the discussion, explore our research, and learn more about our advisors, partnerships, and events to come. Follow @coinbase and join the conversation.

Introducing the Coinbase Institute: Advancing the policy debate around crypto and the future of… was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Employee note: An update on hiring plans

May 17, 2022 Coinbase

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By Emilie Choi, President and Chief Operating Officer

I shared an update with our employees today that I want to also share publicly. Please note that these changes are not expected to have any material impact to our previously communicated expense outlook for Q2, or full-year 2022, as disclosed in our Q1 shareholder letter.

Tl;dr: To ensure we’re best positioned to succeed during and after the current market downturn, we’re announcing we’re slowing hiring so we can reprioritize our hiring needs against our highest-priority business goals.

Hi all:

We’ve made an important decision to ensure we’re being rigorous in our resource prioritization so we can emerge from this down cycle even stronger than we are today.

Heading into this year, we planned to triple the size of the company. Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals. Headcount growth is a key input to our financial model, and this is an important action to ensure we manage our business to the scenarios we planned for, specifically the potential Adjusted EBITDA we are aiming to manage to.

Importantly, now is the time to ensure we are fully integrating all recent hires — so we can ensure that they are successful at Coinbase. This slow down will also force us to be more rigorous in our prioritization.

Big picture: We know this is a confusing time and that market downturns can feel scary. But as we said at last week’s Town Hall, we plan for all market scenarios, and now we are starting to put some of those plans into practice.

We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time.

Like I said in my top of mind email on Friday marking Coinbase’s 10-year anniversary, the best is absolutely yet to come for us.

Best,
Emilie

Employee note: An update on hiring plans was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Top of Mind: Staying Focused During Market Downturns

May 12, 2022 Coinbase

By Brian Armstrong

Sharing a note I sent to the Coinbase team last night.

We have a cultural norm not to discuss short term stock price fluctuations, but I’m going to break our norm in this case given the wild volatility we’re seeing. I realize it can be scary to see our stock price down with associated negative headlines. Of course, we are not alone, and there is a broader market downturn as well which adds fuel to the fire.

In times like these we need to step back, and zoom out. Nothing about Coinbase changed this week, we are the same company we were yesterday, or a year ago. If anything, we are in an even stronger position given our balance sheet. This last bull cycle has generated tremendous profit and cash that adds to our resiliency, and we have built an incredible team with some of the best talent in the world.

Volatility is inevitable. We can’t control it, but we do plan for it. Through the ups and downs of crypto over the last 10 years, Coinbase has focused on building. Through the highs we get to focus on scaling and many new people get introduced to crypto. Through the lows we get to focus on innovation and paying off tech debt.

I don’t know how long this down-cycle will last, or if we are at the bottom. I just know that we will make it through to the other side, and we come out stronger than ever if we focus on what matters: building.

Tomorrow we have our bi-weekly town hall, and we know employees have questions. We’ll address the most frequent questions we’re hearing. We will also address the public concern about a disclosure we made in our 10Q filing, which I tweeted about yesterday, as well.

See you all tomorrow,

Brian

P.S. I’m attaching a note I sent to the company right after we went public:

Team,

Congratulations on an incredible week! It’s hard to believe how far Coinbase has come in just under a decade. One of the most challenging parts about working in this industry is managing through the highs and lows of crypto cycles. Whether this is the first cycle that you’ve seen up close, or your fourth, it can be emotional to see significant price changes, along with how they can alter the external perspective on our industry. In the past, we just had crypto prices to watch. But now, we have a new price to watch: our share price.

This moment right now feels great. We’re a public company, we’re profitable and crypto is the hot topic. But with that excitement comes a lot of hype and high expectations that can occasionally lead to over-exuberance, including around Coinbase itself.

It’s important that we don’t let external noise set the wrong expectations for what success looks like. While I’m certainly proud of what we’ve accomplished, and excited to see so much interest in crypto, it’s important to ignore the hype and focus on what we can control. We are not our stock price, or the price of bitcoin. Maintaining our focus on the long-term mission, regardless of what the world is doing around us, is the only way we’ll succeed with ambitions as large as ours.

I personally plan to not look at the stock price except for rare instances such as quarterly earnings calls, or as needed to discuss employee compensation matters. So I’d like to take this moment to establish a new cultural norm, which is that we will not discuss short term stock price fluctuations in the normal course of business. I think it’s incredibly important to keep a clear mind, and focus on what matters over the long term, and hopefully this will help us do that.

Let me share a quick story about a number of employees who joined at the peak of the 2017 bull run. They thought they were joining a rocket ship that was only going one way: up. Many of them were disappointed and some even left after things trended down for a year or two. But if you zoom out to a 3-year timeframe, employees who stayed were incredibly well rewarded. The same is true for those that purchased crypto at the peak of the 2017 bull run and held. It took real conviction and long-term perspective to stick through the crypto winter (especially when others said it was foolish), even if now it seems so clear in hindsight. There is a real art to tuning out all the noise in the world, and focusing on the rare bit of signal which helps you develop your own convictions.

Both up and down markets are helpful for their own reasons. The down markets bring a focus on innovation, and the short term thinkers tend to get distracted and leave the ecosystem. In up markets we get to focus on scaling, and a massive wave of adoption introduces crypto to more people for the first time. Every time a new hype/despair cycle emerges, my main takeaway is to be thankful that we persisted through the last one with our long term thinking.

We need to be sure we don’t let the current hype get to our heads. At the end of this cycle we may see crypto prices or our stock price fall, and some people will become disillusioned and walk away from crypto again. We will need to ignore that volatility and keep making forward progress on our long-term goals regardless of what the market is doing that day.

If you can’t ignore the hype while things are trending up, then you can’t ignore the despair when things are trending down. Stay strong, keep a long term perspective, and let’s keep building.

Have a great weekend!

Brian

Top of Mind: Staying Focused During Market Downturns was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Coinbase files shelf registration statement with the SEC

May 10, 2022 Coinbase

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Tl;dr: This shelf registration positions Coinbase to prospectively access the capital markets quickly and efficiently when needed or when market conditions are optimal.

Today we filed a shelf registration statement with the Securities and Exchange Commission (the “SEC”). This shelf registration statement is intended to be used for potential prospective offerings which may include the sale of new securities for general corporate purposes.

While we have no immediate plans to offer securities at this time, by filing the shelf registration statement now, we will be able to offer and sell securities in the future should we choose to do so. We have chosen to file it today with our Form 10-Q since it is our first quarterly SEC filing since satisfying the eligibility requirements to be classified as a well-known seasoned issuer.

We have taken a thoughtful approach to our capital structure over the years. Our goal has been, and remains, to raise capital at the lowest cost possible to our stockholders. We expect that this shelf registration statement will enable us to issue securities in a much shorter time frame, potentially in a matter of days, which may enable us to better time the market and take advantage of volatility or short windows of favorable market conditions should we choose to do so.

In closing, we believe this shelf registration statement is an important tool that enhances flexibility and better enables Coinbase to prospectively access the capital markets quickly and efficiently when needed or when market conditions are optimal.

Cautionary Statement Regarding Forward-Looking Statements

This blog post contains “forward-looking statements” including, among other things, statements relating to potential future securities offerings by Coinbase; the expected timing and reason for any such offering; and the anticipated benefits to Coinbase and its stockholders from the filing and future use of the shelf registration statement. Statements containing words such as “could,” “believe,” “expect,” “intend,” “will,” or similar expressions constitute forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, whether any securities are offered pursuant to the shelf registration statement; prevailing market conditions across the cryptoeconomy; and the impact of general economic, industry or political conditions in the United States or internationally. For information about other potential factors that could cause actual results or events to differ materially from those described herein, please review the “Risk Factors” included in Coinbase’s Registration Statement on Form S-3 filed with the SEC on May 10, 2022, as well as its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 and other SEC filings. Except as may be required by law, Coinbase undertakes no obligation, and does not intend, to update these forward-looking statements after the date of this communication.

This blog post is neither an offer to sell nor a solicitation of an offer to buy any Coinbase security that may be issued or sold pursuant to the shelf registration statement and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.

Coinbase files shelf registration statement with the SEC was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

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