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News Report

Coinbase Brushes Aside Losses with Plans for Federally Approved Exchange

2 mins
Updated by Ali M.

In Brief

  • Coinbase incurred a net income loss of $2,625 million in 2022.
  • The exchange is reportedly in talks with IEX to launch a federally approved digital assets marketplace.
  • But will the SEC allow Coinbase to go ahead with the plans?
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Coinbase may just have reported heavy losses, but it hasn’t dented its ambition. Rumors are circling it is reportedly partnering with Investors’ Exchange to create a regulated digital marketplace.

The crypto winter has taken its toll on Coinbase’s financials. According to its latest fourth-quarter and full-year results, the exchange reported a loss of $2,625 million in 2022.

Screenshot from Coinbase's letter to shareholders
Source: Coinbase Shareholders’ Letter

However, Coinbase might be trying to turn 2023 in its favor by becoming the first federally approved marketplace in the U.S.

Coinbase Allegedly Plans to Build First Regulated Crypto Marketplace

According to a Fox Business report, the chairman of Investors’ Exchange (IEX), Brad Katsuyama, is in talks with Coinbase for a federally approved digital assets marketplace. Katsuyama, along with his three Nasdaq colleagues, founded IEX in 2012.

Katsuyama came to prominence when author Michael Lewis featured the story of IEX in his book, Flash Boys.

People with direct knowledge of the matter gave information about the Coinbase partnership. But, according to an IEX spokeswoman, “We continue to consider ways that we can help provide a regulatory path for digital asset securities, including conversations with regulators and other market participants, but have not finalized any specific proposal that includes any third parties.”

Katsuyama previously sought to fulfill his crypto exchange ambitions with the now-bankrupt exchange FTX. In April 2022, the FTX founder, Sam Bankman-Fried, purchased a stake in IEX to expand to equities trading and institutional clients.

FTX founder Sam Bankman-Fried, Brad Katsuyama, and the Securities and Exchange Commission (SEC) chair, Gary Gensler, also had meetings to discuss the matter.

Will the Securities & Exchange Commission (SEC) Allow It?

The community, however, believes the chances of the SEC approving the plans are slim. It has been aggressively cracking down on Web3 firms. This month, it fined Kraken $30 million and ordered the closure of its staking reward facilities. Then the BUSD issuer Paxos had to terminate its relationship with Binance due to legal pressure from the SEC.

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