COINCoinbase

We note your response to prior comment 1 that you have "initiated a process to identify an address to satisfy the principal executive offices requirement for purposes of [your] filings with the Commission and will disclose such address in the Company's future filings with the Commission no later than the Company's Annual Report on Form 10-K for the year ended December 31, 2024." Please disclose the address of your

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principal executive offices in your next Exchange Act report.

The Company advises the Staff that beginning with the Company’s Current Report on Form 8-K filed in connection with the Company’s public release of earnings for the quarter ended September 30, 2024 the Company has included, and will include in future filings with the Commission, an address as requested by the Staff. Read in the reply ↗

We note your response to prior comments 18 and 21 and your disclosures on pages 14, 15, 19 and 28 of the June 30, 2024 Form 10-Q and page 140 of the December 31, 2023 Form 10-K, regarding various items that are recognized in transaction expense. In future filings, please expand your transaction expense accounting policy disclosure for each applicable section (e.g.

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collateral, crypto assets borrowings, accounts and loans receivable, etc.) to describe where realized and unrealized changes in fair value are classified. In addition, given transaction expense appears to include gains and losses related to several different items (e.g. loans receivable, loans payable and collateral), tell us what consideration you have given to providing a table disaggregating this income statement line item in your Management’s Discussion and Analysis.

to the Staff’s comment, the Company advises the Staff that, beginning with the Q3

2024 Form 10-Q, the Company has enhanced its disclosures in the Transaction Expense section of its Components of Results of Operations in Management’s Discussion and Analysis of Financial Condition and Results of Operations

(“MD&A”) to disclose that the gains and losses on fair value remeasurement of each of these assets and liabilities are included within transaction expense.

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For the reasons described below, the gains and losses on these assets and liabilities have a net immaterial impact on the Company’s transaction expense (approximately $1.0 million for the six months ended June 30, 2024 and $0.8 million for the nine months ended September 30, 2024). Beginning with the 2024 Form 10-K, the Company will similarly enhance the disclosure regarding its transaction expense accounting policy in Note 2. Summary of Significant Accounting Policies of the Notes to the consolidated financial statements.

The Company further advises the Staff that it already provides a table disaggregating transaction expense in the MD&A included in the

Company’s periodic filings with the Commission. The Company refers the Staff to the table at the top of page 48 in the Q2 2024 Form 10-Q and the bottom of page 45 of the Q3 2024 Form 10-Q. The Company does not disclose as separate line items in this table, nor does it quantify in the associated narrative discussion of changes in transaction expense during the period, the offsetting gains and losses on changes in fair value of these assets and liabilities, as they naturally offset each other – gains and losses on the change in fair value of crypto asset borrowings is offset by gains and losses on the change in fair value of the associated crypto assets borrowed and crypto asset loans receivable originated from borrowed assets, while gains and losses on the change in fair value of the obligation to return collateral is offset by the gains and losses on the change in fair value of associated crypto assets held as collateral. Because lending and borrowing transactions have naturally offsetting fair value movements and are fully collateralized and therefore there is limited associated credit risk, these activities have not had, and the Company does not anticipate these activities will have, a material net impact on transaction expense. Accordingly, the Company has not revised its disclosure in MD&A as it does not believe that this information with respect to these activities is material to investors.

The Company also advises the Staff that it has already provided the gross gain and loss amounts in the Notes to the condensed consolidated financial statements specific to these assets and liabilities (including, for example, Note 6. Collateralized Arrangements and Financing and Note 12. Derivatives of the Notes to the condensed consolidated financial statements included in the Q2 2024

Form 10-Q and the Q3 2024 Form 10-Q). Further, the Company refers the Staff to its disclosures in Quantitative and Qualitative Disclosures about Market Risk (“Market Risk”), specifically to the tables on pages 60 and 61 of the Q2 2024 Form 10-Q and pages 58 and 59 of the Q3 2024 Form 10-Q, which quantify the impact of these assets and liabilities on the condensed consolidated balance sheets and statements of operations. The Company advises the Staff that there are no crypto asset or liability positions excluded from the Market Risk disclosure that materially impact transaction expense. The Company has provided below for the Staff’s reference tables showing the gains and losses on changes in fair value of each of these assets and liabilities, cross-referencing to each of the respective disclosures in the Q2 2024 Form 10-Q and the Q3 2024 Form 10-Q where the amounts are shown. Amounts below are the gains (losses) on the respective exposures recognized during the six months ended June 30, 2024 and the nine months ended September 30, 2024.

Six Months Ended

June 30, 2024

Crypto asset borrowings (see Note 12)

$

(49,815

)

Obligation to return collateral (see Note 12)

(32,092

Crypto assets pledged as collateral (see Note 12)

—

Gross Financing Derivatives (see Market Risk)

(81,907

Crypto asset loan receivables originated from borrowed assets

(3,555

Crypto assets borrowed (see Note 6)

53,370

Crypto assets held as collateral (see Note 6)

32,092

Net Financing Positions (see Market Risk)

Nine Months Ended

September 30, 2024

(26,018

(30,511

(56,529

(4,555

30,573

30,511

As illustrated above, these gains and losses are naturally offsetting, all within transaction expense. This is because the underlying asset and liability positions are matched, in total and on an asset by asset basis, such that they move in tandem, and there is negligible associated credit risk or market risk that could result in a material loss. The Company believes that expanding the transaction expense table to provide these eight additional rows each period would not be meaningful to, and would potentially confuse, investors as these are not, nor does the Company anticipate they will be, drivers of transaction expense. The Company also believes that doing so would be inconsistent with Staff guidance on not repeating disclosures throughout the filings. This information, in the context of a discussion of changes in transaction expense, is not meaningful, and potentially would lead to confusion with respect to the true drivers of changes in the Company’s expenses between periods and the possible material drivers of future expenses. If such activities were to drive material changes in results between periods, the Company would disclose the drivers of such changes in the applicable period, including gains and losses associated with the items identified by the Staff.

The Company advises the Staff that these gains and losses are unlike the other variables the Company discusses in MD&A which do in fact drive the Company’s transaction expense. Unlike the variables disclosed in MD&A, the gains and losses noted in the Staff’s comment move in tandem in a manner that naturally offset one another. The Company also advises the Staff that it surveyed and did not find similar disclosure to that requested by the Staff in the Commission filings of other financial services companies and, if in the future the Company’s underlying exposures driving such gains and losses in a period are disconnected or otherwise have associated unsecured credit risk in a manner that results in independently driving transaction expense in a material manner, the Company will, as noted above, disclose such gains and losses.

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We note your response to prior comment 16 and your enhanced disclosure that you may receive crypto assets as a form of payment for certain services. We further note your statement that those crypto assets are converted to cash near immediately. Please address the following with respect to your response and revised disclosure: • Tell us the timeframe you consider to be “near immediate” for these purposes.

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In your response, explain to us why you recorded a gain of $86.4 million and a loss of $31 million for the three months ended March 31, 2024 and June 30, 2024, respectively, on crypto assets held for operations, despite disposing of the assets in a near immediate timeframe. • Tell us how you have determined that crypto assets held for operations comply with ASC 350-60-50-5 and thus do need not be included in disclosures required by paragraphs 3 and 4 for ASC 350-60-50. In this regard, it appears that crypto assets held for operations are not strictly converted to fiat but may be used for other purposes (e.g. funding loans receivable or used timely to fulfill corporate expenses).

to the first bullet point in the Staff’s comment:

Crypto assets held for operations are primarily received from the Company’s ordinary revenue generating activities (such as transaction fees earned in crypto assets, blockchain rewards, etc.) and are tracked separately from the Company’s crypto assets held for investment. The Company either liquidates or uses crypto assets received from these revenue generating activities to pay miner fees and staking rewards, and make other crypto denominated vendor payments.

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The Company maintains low target minimum balances that it keeps for crypto assets held for operations to ensure that it can always pay crypto-denominated expenses, and it accounts for these assets on a first-in-first-out basis. The Company does not hold, and has never held, these assets with the intent to earn a profit or sell based on market conditions. These balances of crypto assets held for operations are segregated and, by company policy, they are not eligible to be used for a purpose other than in connection with its operating activities (i.e. they can’t be used for investment).

ASU 2023-08 does not define “near immediately” and refers to Accounting Standards Codification (“ASC”)

230-10-45-27A, which defines “near immediately” in this context as “referring to a short period of time that is expected to be within hours or a few days rather than weeks.” The crypto asset held for operations turnover timing is driven primarily by the Company’s operational liquidation process and expense payment cycles. The Company has implemented controls to evaluate its turnover regularly to ensure it is compliant with near immediate turnover. During the nine months ended September 30, 2024, the Company’s weighted average turnover of crypto assets held for operations was less than eight days, which the Company believes is consistent with the term “near immediately.”

[*]

The Company advises the

Staff that the net gain recorded by the Company on crypto assets held for operations for the three months ended March 31, 2024 was a result of rapid price appreciation of crypto assets coupled with crypto market volatility experienced during the first quarter of 2024. For example, during the first quarter of 2024, prices for BTC, ETH, and SOL, which comprise the majority of our crypto assets held for operations, rose 69%, 60%, and 99%, respectively, and the Company had gross inflows of these three assets of [*] and gross outflows of [*] in the same period through its operational liquidations and crypto asset expense payments.

The $31.0 million net loss recorded by the Company on crypto assets held for operations for the three months ended June 30, 2024 was a result of declining prices after a period of rapid price appreciation. In the second quarter of 2024, the prices of BTC, ETH, and SOL declined 12%, 6%, and 28%, respectively, and the Company had gross inflows of these three assets of [*] and outflows of [*] in the same period through its operational liquidations and crypto asset expense payments.

The Company recorded a net gain on crypto assets held for operations of $0.1 million for the three months ended September 30, 2024, as reported in the Q3 2024 Form 10-Q.

In response to the second bullet point in the Staff’s comment:

The Company further advises the Staff that crypto assets held for operations comply with ASC 350-60-50-5 as they are nearly immediately converted to cash or used to pay miner fees and staking rewards, and make other crypto denominated vendor payments, and therefore do not need to be included in disclosures required by ASC 350-60-50-3 and ASC 350-60-50-4. The Company has not funded loans receivable with its crypto assets held for operations, which the Company has clarified through revised disclosure on page 17 of the Q3 2024 Form 10-Q, and only uses such assets for the aforementioned activities. The Company believes that utilizing crypto assets held for operations to fulfill corporate expenses nearly immediately from initial receipt should be excluded from the disclosures for the same reason as crypto assets converted nearly immediately to cash: as noted in paragraph BC68 of ASU 2023-08, it does not provide investors with meaningful information because the Company has no ongoing risk exposure to crypto assets, even if that activity was significant during the period and therefore that the Company has complied with the requirements of ASC 360-60-50-5. Accordingly, no reconciliation is provided for crypto assets held for operations, and this activity is presented net within changes in operating assets and liabilities in Other current and non-current assets in the statements of cash flows, as presented in Note 20. Supplemental Disclosures of Cash Flow Information.

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It appears you present crypto assets held for operations as a component of other current assets. Please tell us how your presentation is consistent with ASC Topic 35060-45-1 which requires crypto assets to be presented separately from other intangible assets in the statement of financial position.

The Company advises the Staff that crypto assets held for operations are not considered material, representing less than 0.03% of the

Company’s total assets as of both June 30, 2024 and September 30, 2024, as reported in the Q2 2024 Form 10-Q and Q3 2024 Form 10–Q, respectively, and that the Company does not expect crypto assets held for operations to become material in the future. Due to this, the Company has presented these crypto assets within Other current assets on the Company’s condensed consolidated balance sheets, and separately disclosed the assets in Note 10.

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Other Condensed Consolidated

Balance Sheets of the Notes to the condensed consolidated financial statements included in the Q2 2024 Form 10-Q and the Q3 2024 Form 10-Q. Moreover, the Company advises the Staff that no intangible asset other than goodwill and the crypto assets held for investment currently exceeds 5% of the Company’s total assets, and therefore the Company is not required pursuant to Rule 5-02 of Regulation S-X to state separately in its statement of financial position any such item. Accordingly, goodwill and the material crypto asset balances are presented separately on the Company’s consolidated balance sheets and other intangible assets are presented separately and condensed within Other non-current assets on the Company’s consolidated balance sheets. Notwithstanding the above, in order to present a complete picture of the crypto assets held on the face of the consolidated balance sheets, beginning with the 2024 Form 10-K, the Company will present crypto assets held for operations as a line item on the face of its consolidated balance sheets.

Read in the reply ↗

We acknowledge your response to prior comments 17 and 24. Please address the following: • In your response, you indicate that you do not account for stablecoin revenue in accordance with ASC 606 in part because you have determined Circle does not meet the definition of a customer.

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Provide us with a detailed analysis of the authoritative accounting guidance that you do apply to your stablecoin revenue recognition and how that guidance supports your recognition both prior to and after the August 2023 changes to your agreements with the issuer of USDC. As part of your response, explain to us how your application of ASC 860 is relevant to the recognition of stablecoin revenue, which appears to be related to the return on reserve assets held by Circle. • Expand your analysis to include a more robust discussion of why you believe Circle is not a customer under ASC 606 and why Circle does not obtain goods or services that are an output of the Company's ordinary activities. In that regard, we note that revenue generated from your agreement with Circle comprised approximately 22% and 15% of total revenue for the year ended December 31, 2023 and six months ended June 30, 2024, respectively. • Tell us what your obligations are under each of the original and current agreements including the specific formulas used to calculate your share of stablecoin revenue, what specifically your agreement with Circle requires of you and who controls reserves. • Tell us how you considered USDC purchaser redemption rights, including that purchasers who acquire USDC from you cannot redeem directly with Circle, in your determination that compensation from your arrangements with Circle is revenue. • Supplementally provide us with the original and current agreements that govern how revenue is paid from Circle to Coinbase. Note 6. Collateralized Arrangement and Financing Loans and related collateral, page 17 Please tell us and enhance your disclosures in future filings to address the following: • Clarify how you account for Prime Lending interest income and fees. In your response and revised disclosure, address when interest income is accrued, and how you account for any differences between the value of consideration on the date of accrual and date of settlement. In your response, you indicate that interest on loans may be paid by the borrower in cash. When interest is paid in cash, it is calculated in crypto units and converted to a cash amount using the end of month spot price for the crypto asset lent. Explain to us how you account for any difference between the accrued daily • 7. amount of interest due and the amount paid based on the end of month crypto spot price. • Clarify where Prime Lending interest income and fees are recognized in the statements of operations. 8. We note your response to prior comment 22 and your disclosure that you adopted ASU 2023-08 effective January 1, 2024, including disclosure of reconciliations for crypto assets held as collateral, crypto assets borrowed, and crypto assets held for investment as required. Please address the following: • Revise to present realized and unrealized changes in fair value for crypto assets held for investment. • Provide us and include in future 2024 quarterly reports, all the annual reconciliations as required, including a schedule that aggregates all crypto asset transactions as required. Refer to ASC 350-60-50-3, ASC 250-10-50-2 and Rule 10-01(b)(7) of Regulation S-X. • Tell us how you considered disaggregating customer collateral pledged, not recognized by type of crypto asset (bitcoin, ether, etc.). • Clarify for us whether assets held in Coinbase accounts designated as collateral are included in the customer collateral pledged, not recognized disclosed on page 19. If assets in accounts designated as collateral are not included in this balance, explain to us how you considered the need to disclose these collateralized assets. • Explain to us how you determined fiat held in Coinbase accounts designated as collateral should not be recorded by the company and cite the relevant accounting literature. 9. We note your response to our prior comment 10. In your response you indicate that you do not derecognize loaned USDC following the guidance in ASC Topic 860. Tell us how you have considered the fact that possession of the USDC has been transferred to counterparties in these transactions, and whether you believe counterparty risk should be reflected in your accounting for loaned USDC. Provide the basis for your conclusion in your response. In addition, tell us whether you pledged any USDC as collateral as of year-end and the most recent interim period end, and the amount of USDC pledged. Borrowings and related collateral, page 19 10. Please tell us and enhance your disclosures in future filings to address the following: • Clarify how you account for fees on crypto asset borrowings. In your response, and revised disclosure, please address when borrowing fees are accrued, and how you account for any differences between the value of consideration on the date of accrual and date of settlement. • Clarify where borrowing fees are recognized in the statements of operations. Note 9. Customer Assets and Liabilities, page 22 11. We acknowledge your response to prior comment 22. Please address the following: • Please provide us with the following information related to your blockchain rewards as of the most recent 2024 interim financial statement period available (and the comparable period). To the extent you are able, provide the information in the form of a schedule that reconciles to the total blockchain rewards recognized for each period: o Tell us the amount of blockchain rewards revenue recognized for staking your own assets held for investment, staking assets on behalf of customers on your own nodes and staking assets on behalf of customers on nodes operated by third parties. o Tell us the amount of blockchain rewards revenue recognized by type of staking asset supported by your platform. o Provide us a schedule detailing the amount of assets staked for each asset supported by your platform, disaggregated by type of customer (i.e. individual or institutional). • Clarify for us whether the Company recognized any revenue (in any revenue line item) for staking the Company’s own assets in 2023 or 2024 (through the most recently completed period). To the extent rewards were recognized, please tell us the total revenue recognized in each period, where revenue was recorded, disaggregated by type of crypto asset staked (e.g. ETH, SOL, ATOM, etc.). • Specifically, for ETH and ATOM, separately provide us with a detailed step by step walkthrough of the staking process for consumer customers and institutional customers. Your fulsome step by step analysis should begin with a customer’s decision to stake their assets, and include (but not necessarily be limited to) the o Explain various staking options provided to the consumer to stake the specific asset (ETH and ATOM). o Explain how the company handles the staked asset once the consumer decides to engage in staking. o Explain how the company interacts with the protocol, including any services the company provides to the protocol by virtue of operating a validator node (if applicable). o Explain how/why staking rewards are transferred by the protocol to the company. o Explain how staking rewards are transferred by the company to the consumer. • Specifically, for both ETH and ATOM, separately provide us with an analysis of how you have considered the five criteria in ASC 606 in determining your revenue recognition policies. In your response, provide a detailed response for both consumer and institutional customers. Management's Discussion and Analysis of Financial Condition and Results of Operations, 12. We note your response to prior comment 11 and that changes in average blended fee rate continued to be a driver of changes in consumer and institutional transaction revenue during the three and six months ended June 30, 2024. Please address the • Expand your disclosures to include a narrative discussion of the different transaction fee levels charged to consumer and institutional customers with a discussion of the basis for charging different fees (e.g. volume of transaction). • Tell us how you considered the need to provide key performance indicators related to transaction fee levels (e.g. average blended fee rate, average transaction spread etc.). 13. We note your response to prior comment 12. Among other things, it appears that your safeguarding liability includes both crypto assets custodied for users of your trading platform and crypto assets for which you provide a specific custodial service and generate a fee (e.g. crypto assets custodied for crypto asset funds). Given the increasing trend in your custodial fee revenue, please tell us what consideration you have given to providing disaggregated disclosure for your safeguarding obligation related to custodial services. Subscription and services revenue, page 46 14. Your key business metrics primarily consist of metrics that drive transaction revenue. Considering that stablecoin revenue and blockchain rewards are material components of total revenue, please tell us how you considered the need to provide KPIs specific to these lines of business (e.g. as disclosed on page 5 of your Q2 24 Shareholder letter). Non-GAAP Financial Measure, page 53 15. Please further expand the disclosure in your Form 10-Q for the quarter ended September 30, 2024 to more clearly explain how Adjusted EBITDA provides investors with useful information regarding your results of operations. Refer to Item 10(e)(1)(i)(C) of Regulation S-K. 16. As you have described in your Form 10-K, your operating results are dependent on crypto assets and have and will continue to fluctuate significantly due to their highly volatile nature. As the volatility of crypto assets is inherent to your operations, revenue generating activities, business strategy, and industry, it appears that impairments on these assets (pre-adoption of ASU 2023-08) were part of your normal, recurring operations. Accordingly, please revise to remove the non-GAAP adjustment for impairment on crypto assets still held, net (pre-adoption of ASU 2023-08) in your reconciliation of Adjusted EBITDA. Refer to Regulation G and question 100.01 of the Compliance and Disclosure Interpretations for Non-GAAP Financial Measures. With the adoption of ASU 2023-08, we note that you adjust for gains and losses on crypto assets held for investment in your reconciliation of Adjusted EBITDA. Please describe in more detail the nature of crypto assets held for investment, your 17. investment strategy for these assets, and how these assets are used in your operations. Tell us what circumstances, if any, would change your current plans to hold these assets for the long-term. 18. We note that, following the adoption of ASU 2023-08, the crypto assets you hold are measured at fair value with gains and losses recognized through net income. However, the adjustment for Gain on crypto assets held for investment, net (post-adoption of ASU 2023-08) has the effect of reversing your adoption of the new standard for your crypto assets held for investment. Please tell us why you believe this adjustment is appropriate and how you considered question 100.04 of the Compliance and Disclosure Interpretations for Non-GAAP Financial Measures. 19. You state that you adjust for Other (income) expense, net in total in your reconciliation of Adjusted EBITDA because the entire line item represents nonoperating activity. Please revise to present and quantify each non-GAAP adjustment included within this line item separately in the reconciliation or in a detailed footnote to the reconciliation. In addition, explain how you determined that each of the components of Other (income) expense, net do not relate to your operations. For example, it appears that Strategic investment losses, net relates to your operations, revenue generating activities, and business strategy as you state in your Form 10-K for the year ended December 31, 2022 that you have actively pursued strategic investments in products, technologies, and companies that will strengthen and expand your business and provide access to new customers and markets. With your response, please also address Gains on crypto asset loan receivables and Gains on other financial instruments, net. Item 1A. Risk Factors The Most Material Risks Related to Our Business and Financial Position A particular crypto asset, product or service's status as a "security", page 80 20. We note your response to prior comment 5. In your response, you indicate that you no longer intend to include the disclosure that “there is currently no certainty under the SEC’s application of the applicable legal test as to whether particular crypto assets, products, or services would be deemed securities” in your Item 1 disclosure. However, we note that substantially similar disclosure was included in the risk factor on page 80 of your Form 10-Q filed August 1, 2024. Please confirm that in future filings you will revise your risk factor disclosure consistent with your proposed revised Item 1 disclosure. We also note the statement that "whether any given crypto asset, product or service would be ultimately deemed to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw based on our risk-based assessment." In future filings please revise to clarify, if accurate, that you are referring to being deemed a security by a federal court. The theft, loss, or destruction of private keys required to access an crypto assets, page 87 We note your response to prior comment 6 and the risk factor "The theft, loss, or destruction of private keys required to access any crypto assets held in custody for our own account or for our customers may be irreversible" on page 87 of your Form 10-Q 21. filed August 1, 2024. We note your disclosure in that risk factor that "the level of insurance maintained by us may not be available or sufficient to protect us or our customers from all possible losses or sources of losses." Please revise this risk factor in future filings to describe your limited coverage in greater detail, providing your shareholders a better understanding of how the total value of insurance coverage that would compensate you in the event of theft or other loss of funds compares to the total value of crypto assets in your possession and control. Additionally, tell us in your next response whether you may be liable for the full amount of losses suffered, which could be greater than all of your remaining assets, and if such is the case, please disclose that fact in future filings. Other Risks Related to Our Business and Financial Position Because our long-term success depends, page 91 22. We note your response to prior comment 7 and reissue in part. In your next response letter please describe for us in greater detail the current functionality of the NFT marketplace.

, you indicate that you do not account for stablecoin revenue in accordance with ASC 606 in part because you have determined Circle does not meet the definition of a customer. Provide us with a detailed analysis of the authoritative accounting guidance that you do apply to your stablecoin revenue recognition and how that guidance supports your recognition both prior to and after the August 2023 changes to your agreements with the issuer of USDC.

Rest of the answer

As part of your response, explain to us how your application of ASC 860 is relevant to the recognition of stablecoin revenue, which appears to be related to the return on reserve assets held by Circle.

Expand your analysis to include a more robust discussion of why you believe Circle is not a customer under ASC 606 and why Circle does not obtain goods or services that are an output of the Company’s ordinary activities. In that regard, we note that revenue generated from your agreement with Circle comprised approximately 22% and 15% of total revenue for the year ended December 31, 2023 and six months ended June 30, 2024, respectively.

Tell us what your obligations are under each of the original and current agreements including the specific formulas used to calculate your share of stablecoin revenue, what specifically your agreement with Circle requires of you and who controls reserves.

Tell us how you considered USDC purchaser redemption rights, including that purchasers who acquire USDC from you cannot redeem directly with Circle, in your determination that compensation from your arrangements with Circle is revenue.

Supplementally provide us with the original and current agreements that govern how revenue is paid from Circle to Coinbase.

The Company advises the Staff that the Company and Circle entered into an arrangement in 2019 (the “Original Distribution Agreement”) under which the Company earned income generated from USDC reserves based on the amount of USDC distributed by each respective party and the amount of USDC held on each respective party’s platform in relation to the total amount of USDC in circulation. The Company did not have any obligation to distribute USDC as part of this arrangement.

In August 2023, the Company entered into the Circle Agreement, pursuant to which the Company earns income for its role in the distribution of

USDC and growth of the USDC ecosystem. These payments are determined based on the daily income generated from the reserves backing USDC, less the management fees charged by non-affiliated third parties for managing such reserves (such as asset management and custody fees) and certain other expenses (the “payment base”). From the payment base, (i) Circle retains a portion based on the amount of USDC in circulation on such day, in consideration of its role as stablecoin issuer and which is designed to reimburse Circle for indirect costs of issuing stablecoins and the management of the associated reserves, such as maintaining related accounting, treasury, regulatory, and compliance functions,

(ii) the Company and Circle each receive an amount equal to the remaining payment base multiplied by the percentage of such stablecoin that is held in the applicable party’s custodial products or managed wallet services at the end of such day, and (iii) the Company receives 50% of the remaining payment base. At all times, the dollar denominated assets held as reserves for the benefit of USDC holders are managed by Circle, while the Company has agreed to distribute and resell

USDC and other applicable stablecoins issued by Circle. The dollar denominated assets held as reserves for the benefit of USDC holders are not controlled nor consolidated by the Company.

The Company advises the Staff that the accounting analysis provided in the May Letter in response to the Staff’s comment 17 contained in the April Letter is applicable to both the Original Distribution Agreement and the Circle Agreement. Therefore, the Company refers the Staff to its previous response contained in the May Letter.

The Company performed a detailed accounting analysis of the Circle Agreement and first considered whether the Circle Agreement met the definition of a financial instrument, as defined in the ASC 825 –Financial Instruments (“ASC 825”). The Circle Agreement does not represent cash or evidence of ownership in an entity. Further, it does not impose an obligation or convey the right to deliver or receive cash or another financial instrument or exchange other financial instruments. Therefore, the Company determined that the Circle Agreement does not meet the definition of a financial instrument in accordance with ASC 825-10-20 and is not within the scope of ASC 825.

The

Company considered whether the Circle Agreement is a derivative instrument in accordance with ASC 815 –Derivatives and Hedging (“ASC 815”). In accordance with ASC-815-10-15-59(d), contracts that are not exchange-traded and where the underlying on which settlement is based on specified volumes or service revenues of one of the parties are explicitly excluded from ASC 815. As the underlying is based, in part, on the interest revenues of Circle, the

Circle Agreement would meet this scope exception. Further, in accordance with ASC 815-10-15-83 and ASC 815-10-15-92, the Circle Agreement does not contain a stated minimum notional amount or a determinable notional for the determination of the monthly settlements. The base for determination of the payment is variable and is dependent on the actual reserves held by Circle. Further, the Circle Agreement does not contain a payment provision that specifies a fixed or determinable settlement to be made if the underlying behaves in a specified manner. Therefore, both a scope exception applies and the notional criterion above is not met and the Circle Agreement does not meet the definition of a derivative and is not within the scope of

ASC 815.

The Company considered whether the Circle Agreement is a collaborative arrangement in accordance with ASC 808

–Collaborative Arrangements (“ASC 808”). The Company notes that while the Circle Agreement refers to agreeing on terms related to USDC and other stablecoins and outlines certain criteria for meeting product thresholds, the terms of the Circle Agreement do not outline any specific joint operating activity whereby both parties are active participants that are exposed to significant risks and rewards depending on commercial success of the activity in accordance with ASC 808-10-20. Therefore, the Circle Agreement is not within the scope of ASC 808.

As noted, and for the reasons described in the Company’s prior response to the Staff, the Company considered whether the Circle Agreement is within the scope of ASC 606 –Revenue from Contracts with Customers (“ASC 606”) and concluded that

Circle is not a customer.

The Company considered whether it is providing an agency service to Circle by connecting Circle with the customers on the Company’s platform or whether the Company is a principal in its relationships with both Circle and the Company’s customers.

As USDC is a financial asset given it is redeemable on a one-to-one basis for U.S. dollars, the resale of USDC by the Company to the

Company’s customers falls within the scope of ASC 860 –Transfers and Servicing of Financial Assets (“ASC 860”) as financial instruments are explicitly scoped out of ASC 606 by ASC 606-10-15-2. As ASC 860 does not provide specific guidance on the principal versus agent determination, the Company looked to ASC 606 by analogy.

The Company believes that ASC 606 provides an appropriate framework to analogize in the context of whether the Company is the principal to the Company’s customers or serves as an agent between Circle and the Company’s customers, as the Company evaluated whether the Circle Agreement is within the scope of ASC 606. ASC 606-10-25-25 defines control as “the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset.” ASC 606–10-55-37 further indicates that an entity is a principal if it controls a good or service before that good or service is transferred to a customer. ASC 606-10-55-39 provides indicators to support an entity’s evaluation of control. The Company obtains control of the USDC received from Circle and can direct the use of such USDC (for example, sales to customers on the

Company’s platform, sales to customers off-platform, payments to vendors, use in Prime Financing) such that it can obtain substantially all of the remaining benefits of the USDC.

ASC 606-10-55-39 considerations were as follows:

Primary responsibility for fulfillment of USDC

The Company’s customers can purchase USDC directly from the Company’s platform once they have agreed to the Company’s user terms. Per the Company’s user agreement, the Company is primarily responsible for the delivery of USDC to the Company’s customers if purchased from the Company’s platform.

Inventory risk

The Company acquires USDC from Circle using its own funds before reselling it to its customers and holds material USDC “inventory” to facilitate customer orders. The Company does not have any transactions or any bids with its customers lined up prior to acquiring USDC from Circle. If the Company is unable to sell USDC to its customers, it would hold USDC in inventory. Moreover, if the Company holds inventory on any USDC supported blockchain, it is exposed to the risk of loss in the event that there are any attacks or delays on such blockchain.

Discretion in establishing price

The Company has discretion in the fees the Company charges to its customers for USDC transactions, whether to repurchase USDC from its customers and whether to transact or sell USDC off-platform.

Based on the factors above, under ASC 606-10-55 the Company concluded that it is considered a principal in purchasing USDC from Circle as it obtains control over USDC prior to transferring to the Company’s customers and is not providing an agency service to Circle by connecting Circle with the customers on the

Company’s platform. Therefore, the Company would treat its purchases and sales of USDC with the Company’s customers as transactions among holders of USDC and would be considered the principal in those subsequent sales and repurchases.

Thus, the Company concluded it does not act as an agent in providing USDC reselling services to Circle under the Circle Agreement and that the relationship with Circle is more akin to a vendor relationship.

Therefore, the guidance in ASC 606 is not applicable as Circle is not considered to be a customer.

The Company further considered whether the purchaser redemption rights would impact the accounting for the Circle Agreement. As the Company is a principal in both purchasing USDC from Circle and in the subsequent sales and repurchases with the Company’s customers, such rights are only relevant in evaluating those separate contractual arrangements and not in evaluating the Circle

Agreement.

Therefore, as documented in the May Letter, the Company treats the arrangement as an executory contract. In other words, the

Circle Agreement is accounted for on an accrual basis with respect to each monthly calculation period.

The Company applies the guidance in

ASC 450-30 on gain contingencies, which states that a contingency that might result in a gain should not be reflected in financial statements because to do so might be to recognize revenue before it is realizable. The income that the Company earns from the Circle Agreement depends on inputs within the payment base that are not known until the end of the calculation period, and accordingly, there exists a contingency. Therefore, the Company does not recognize any amount due under the Circle

Agreement until the income on reserves is generated for the calculation period and becomes realizable.

ASC 450-30-20 defines a gain contingency as an “existing condition, situation, or set of circumstances involving uncertainty as to possible gain to an entity that will ultimately be resolved when one or more future events occur or fail to occur.”

ASC 450-30-25-1 indicates that a gain contingency should not be recognized “before its realization.” The realization of a gain occurs at the earlier of when the gain is realized or when it is realizable. Revenues and gains are realized when products (goods or services), merchandise, or other assets are exchanged for cash or claims to cash. Revenues and gains are realizable when related assets received or held are readily convertible to known amounts of cash or claims to cash. A claim to cash supporting realization of a gain will often be in the form of a receivable which may arise through a legally binding contractual arrangement detailing payment terms. Substantially all uncertainties about the realization of a gain contingency should be resolved before the gain contingency is considered realized or realizable and recognized in the financial statements.

Further, for an entity to recognize a gain contingency, the claim to cash must meet the definition of an asset. Paragraph E17 of Chapter 4 of

FASB Statement of Financial Accounting Concepts No. 8 provides that an asset has the following two essential characteristics:

a. It is a present right.

b. The right is to an economic benefit.

The Company has a contractual right under the Circle Agreement to receive payments for a share of income generated on USDC reserves held by

Circle as detailed above. The amount of the payments to be received for each given month is determined based on certain inputs which are determined on a daily basis, and certain inputs determined on a monthly basis, based on terms of the Circle

Agreement. The final amount for the period is determined by the Company and Circle on a monthly basis. The Circle Agreement further stipulates that failure to issue an invoice does not constitute a breach under the agreement or a waiver of a right to receive a payment. The payment is then remitted by Circle to the Company on or prior to the last day of the following calendar month.

All the calculation steps that determine monthly payments are clearly stipulated as part of the Circle Agreement. At the end of the month, once daily amounts are added up, the Company has the claim to payment in the form of a receivable that is a present right to an economic benefit and would be considered an asset. Further, the right to this receivable is not dependent on the Company issuing the invoice.

The Company further considered the following factors to determine whether the gain contingency would be realized or realizable for the Circle Agreement:

Are the amounts to be received and the timing of those receivables known?

As discussed above, the amount to be received is known at the end of the month based on daily and monthly inputs and the predetermined calculation. The timing of when the payment will be received is also known and clearly stipulated by the agreement.

Are there any remaining legislative or regulatory approvals needed?

There are no remaining legislative or regulatory approvals that would be required by the agreement to determine payment.

Is the collectability of payment assured?

Based on the Company’s prior history with Circle, the Company determined that there is no concern around collectability of the payment under the Circle Agreement.

Are there relevant parties contesting the payment or amount of payment due?

While the Circle Agreement includes provisions whereby each party can dispute the calculation and pursue a true-up reimbursement for a given month, the amount to be received in any current or future period is not reduced or adjusted for any such disputed amounts, which are subject to separate dispute provisions. Therefore, the dispute does not result in a current or future payment being contested, though it may result in a true-up of the payment received for a prior month, which is a normal business practice.

Are the amounts received nonrefundable upon receipt and not subject to any clawback?

The amounts received under the Circle Agreement are nonrefundable and not subject to clawback or reimbursement, except that, as noted above, amounts paid may be reimbursed or trued-up if the parties agree that there has been an overpayment or underpayment, respectively, in a prior period.

Is realization contingent on the Company’s future performance or future events outside of the Company’s control?

The Circle Agreement does not require any future performance by the Company or the occurrence of any future events. As discussed above, amounts to be received under the Circle Agreement are based on daily inputs and realization is only contingent on the passage of time.

Based on the above considerations, the Company expects the payment amounts under the Circle Agreement to be realizable at the end of each month and would be accrued at the end of each month.

The Company further advises the Staff that the calculation of income under the

Original Distribution Agreement with Circle applies the same accounting guidance cited above and results in the same accounting conclusion as concluded for the Circle Agreement. More specifically under the Original Distribution Agreement, the

Company has concluded that the Original Distribution Agreement is not a financial instrument, does not qualify for derivative accounting treatment, is not a collaborative arrangement, is not a contract with a customer, and is not subject to any other accounting policy under GAAP. Accordingly, the Company treats the Original Distribution Agreement as an executory contract and accounts for it on an accrual basis with respect to each monthly calculation period.

Per the Staff’s request, the Company is supplementally providing the Staff, under separate cover, with copies of the original and current agreements that govern how revenue is paid from Circle to the Company and is requesting confidential treatment with respect to such agreements.

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Revenue, page 16 We have considered your response to our prior comment 6. In order to help us evaluate your response, please address the following: • Clarify for us what you mean by your disclosure that stablecoin revenue is generated, in part, from the distribution of USDC and reconcile that statement with your conclusion that Circle does not meet the definition of a customer as it does not obtain goods or services

Rest of the question

that are an output of your ordinary activities. Consider revising your disclosure in future filings where appropriate. 1. • Expand your disclosure in future filings to provide a more detailed discussion of the formula used to determine your share of stablecoin revenue. In that regard, we note that income is generated based on USDC held on each respective party’s platform as well as from USDC in circulation outside of either party’s platform. • Clarify for us how you determined recognizing stablecoin revenue at month end, prior to true ups being resolved, is consistent with the guidance in ASC Topic 450-30-25-1. • Expand your disclosure in future filings to include a more detailed description of when and how stablecoin revenue is recognized. • Revise your revenue footnote disclosure in future filings to disclose revenue from customers separately from other sources of revenue. Reference is made to ASC Topic 606-10-50-4. 2. We are continuing to evaluate your response to our prior comment 11 and may have additional comments.

to the first bullet point in the Staff’s comment:

The Company advises the Staff that it disclosed that stablecoin revenue is generated, in part, from the sale of USDC to its customers and growth of the USDC ecosystem because the amount of revenue that the Company earns from the Circle Agreement (as defined below) is determined, in part, by the amount of USDC held on the Company’s platform and the size of the USDC ecosystem as a whole.

Rest of the answer

In response to the Staff’s comment, and as set forth below, the Company has revised its disclosures in its Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the Commission on the date hereof (the “2024 Form 10–K”), to remove the reference to revenue being generated from the distribution of USDC.

The Company further advises the Staff that for the reasons described in the Company’s prior responses to the Staff, the Company considered whether its August 2023 agreement with Circle Internet Financial, LLC (“Circle”), as amended, (the “Circle Agreement”) is within the scope of Accounting Standards Codification

(“ASC”) 606 – Revenue from Contracts with Customers (“ASC 606”), and concluded that Circle is not a customer, as no goods or services that are an output of the entity’s ordinary activities are transferred to Circle in exchange for consideration.

As described in the Company’s prior response to the Staff, the Company considered whether it is providing an agency service to Circle by connecting Circle with customers on the Company’s platform and acting as a reseller of USDC. However, the Company concluded that it is a principal in its relationship with its customers, and that the relationship with Circle is more akin to a vendor relationship as the Company obtains control of the USDC received from Circle and can direct the use of such USDC (e.g., sales to customers on the Company’s platform, sales to customers off-platform, payments to vendors, use in Prime Financing, etc.) such that the Company can obtain substantially all of the remaining benefits of the USDC. As the Company obtains control of the USDC before its subsequent sale or use, such subsequent sale or use does not transfer a benefit to Circle, and the Company realizes all the benefits from such subsequent sale or use.

The Company’s sales and use of USDC (e.g., sales to customers on the Company’s platform, sales to customers off-platform, payments to vendors, use in Prime Financing, etc.) are distinct, separate contractual arrangements from the Circle Agreement. The Circle Agreement does not include any terms through which the Company has a performance obligation to provide Circle any good or service within the scope of ASC 606 and, therefore, Circle is not a customer of the Company.

The Company advises the Staff that it has updated its disclosure of its accounting policy for stablecoin revenue in the 2024 Form 10-K to include disclosure in substantially the form set forth below in order to:

Clarify the disclosure by removing the reference to revenue being generated from the distribution of USDC;

Disclose that Circle is not a customer and that the Circle Agreement is not within the scope of ASC 606;

Provide further detail on the formula used to determine stablecoin revenue; and

Provide further detail on the manner and timing of the recognition of stablecoin revenue.

Stablecoin revenue

The Company earns revenue through an arrangement, as updated in August 2023 and further updated in November 2024, with Circle

Internet Financial, LLC (“Circle”). The Company’s revenue from this arrangement is determined based on the daily income generated from the reserves backing USDC, which is dependent on the total USDC market capitalization, defined as the total amount of USDC in circulation, less the management fees charged by non-affiliated third parties managing such reserves and certain other expenses (the “Payment

Base”). From the Payment Base, (i) Circle retains a portion in consideration of its role as issuer of USDC, (ii) the Company and Circle earn an amount based on the share of USDC held on their respective platforms,

(iii) other approved participants in the USDC ecosystem earn an amount based on terms agreed between the approved participant, Circle, and the Company, and (iv) the Company receives 50% of the remaining Payment Base. The arrangement is not within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) as Circle is not a customer of the Company. Revenue is accrued on a monthly basis as it becomes realizable.

In response to the second bullet point in the Staff’s comment:

The Company advises the Staff that it has updated its disclosure in response to the Staff’s comment as reflected in the Company’s response to the first bullet point in the Staff’s comment above.

In response to the third bullet point in the Staff’s comment:

The Company further advises that, as described in the Company’s prior response to the Staff, the Circle Agreement includes provisions whereby each party can dispute the calculation and pursue a true-up reimbursement for a given month. The amount to be received in any current or future period is not reduced or adjusted for any such disputed amounts, and such true-up reimbursements are subject to separate dispute provisions. Given the nature of the calculations and the inputs thereto, the Company does not believe there is a more than remote chance of such adjustments and that were there to be any adjustments, they would be insignificant in nature. Further, to date, the Company has not had any disputes with Circle that have resulted in a true-up adjustment. Accordingly, the amount recognized as revenue is realizable on a monthly basis as that is when the amount due to the Company is readily convertible to a known amount of cash, and, given the lack of history of disputes, the Company does not have an expectation of true-up reimbursements that would result in a prospective adjustment.

In response to the fourth bullet point in the Staff’s comment:

The Company advises the Staff that it has updated its disclosure in response to the Staff’s comment as reflected above in the

Company’s response to the first bullet point in the Staff’s comment.

In response to the fifth bullet point in the Staff’s comment:

The Company acknowledges the Staff’s comment and advises the Staff that its prior presentation disclosed revenue accounted for as contracts from customers separately from other sources of revenue but did not label the revenue streams clearly as such. The Company further advises that it has revised its disclosure of revenue in the 2024 Form

10-K, to add footnotes to the rows where applicable specifying that they comprise revenue from sources that are not accounted for as contracts from customers.

2. We are continuing to evaluate your response to our prior comment 11 and may have additional comments.

The Company acknowledges that the Staff continues to evaluate the Company’s response to prior comment 11.

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Collateralized Arrangements and Financing, page 16 We acknowledge your response to our prior comment 8 regarding the Company’s accounting policy for customer collateral pledged. We note the following from your prior responses and disclosures in your filings: • In your response to our prior comment 18 in your May 1, 2024 letter you state that “when non-cash collateral, i.e., crypto assets or USDC, is received, the

Rest of the question

Company applies the non-cash collateral provisions under ASC 860-30-25-5 to determine whether non-cash collateral is recognized in its consolidated balance sheets… [in] accordance with this guidance, non-cash collateral is only recorded if the Company has the rights to sell or rehypothecate the collateral and a sale of the collateral occurs, or if the borrower defaults under the terms of the secured contract and is no longer entitled to redeem the pledged asset.” • Disclosure in the Company's quarterly filings describes that for non-cash collateral received your accounting determination is based on the Company’s ability to obtain control or the Company’s right to sell, pledge, or rehypothecate the customer collateral. • In your November 15, 2024, response to comment 8 you indicated that non-cash collateral is recognized by the Company in circumstances where USDC or crypto assets are received as collateral into a Coinbase controlled collateral wallet or user wallet but where the Company has contractual rights to sell, pledge, or rehypothecate the collateral. Please reconcile these statements, including clarifying under which circumstance you would recognize USDC or crypto assets received as collateral in a wallet for which the Company has the contractual right to sell, pledge or rehypothecate the collateral and under which circumstances the Company would only recognize collateral once a sale of the collateral occurs or if the borrower defaults under the terms of the secured contract and is no longer entitled to redeem. To the extent the you believe that the guidance in ASC 860-30-25-5 is applicable to circumstances where intangible crypto assets are received as collateral pledged, please tell us why you concluded the 3. guidance in ASC 350 would not be the appropriate literature to apply to determine whether the company has control of the intangible asset received instead of applying the guidance in ASC 860-30-25-5 which is applicable to the receiver of a financial asset for which the transferor of that financial asset has not transferred control as defined in ASC 860-10-40-5. 4. In your response to our prior comment 9 you describe your consideration of the conditions in ASC 860-10-40-5 when USDC is transferred to counterparties under USDC lending arrangements. For transfers of USDC that the Company has concluded should be accounted for as sales under ASC 860, for example in fact patterns in which the Company does not maintain effective control as described in ASC 860-10-40-5(c), please describe the analysis the Company performed to conclude that the transferred USDC would be beyond the reach of your creditors in bankruptcy. For example, please tell us whether for USDC that you derecognize as a result of transferring to a wallet in which you hold the USDC for the benefit of a platform user you have received a true sale opinion consistent with the guidance in ASC 860-10-55-18A and if so, please supplementally provide us with that opinion.

to our prior comment 18 in your May 1, 2024 letter you state that “when non-cash collateral, i.e., crypto assets or USDC, is received, the Company applies the non-cash collateral provisions under ASC 860-30-25-5 to determine whether non-cash collateral is recognized in its consolidated balance sheets… [in] accordance with this guidance, non-cash collateral is only recorded if the Company has the rights to sell or rehypothecate the collateral and a sale of the collateral occurs, or if the borrower defaults under the terms of the secured contract and is no longer entitled to redeem the pledged

Rest of the answer

asset.”

Disclosure in the Company’s quarterly filings describes that for non-cash collateral received your accounting determination is based on the Company’s ability to obtain control or the Company’s right to sell, pledge, or rehypothecate the customer collateral.

In your November 15, 2024, response to comment 8 you indicated that non-cash collateral is recognized by the Company in circumstances where USDC or crypto assets are received as collateral into a Coinbase controlled collateral wallet or user wallet but where the Company has contractual rights to sell, pledge, or rehypothecate the collateral.

Please reconcile these statements, including clarifying under which circumstance you would recognize USDC or crypto assets received as collateral in a wallet for which the Company has the contractual right to sell, pledge or rehypothecate the collateral and under which circumstances the Company would only recognize collateral once a sale of the collateral occurs or if the borrower defaults under the terms of the secured contract and is no longer entitled to redeem. To the extent the you believe that the guidance in ASC 860-30-25-5 is applicable to circumstances where intangible crypto assets are received as collateral pledged, please tell us why you concluded the guidance in ASC 350 would not be the appropriate literature to apply to determine whether the company has control of the intangible asset received instead of applying the guidance in ASC 860-30-25-5 which is applicable to the receiver of a financial asset for which the transferor of that financial asset has not transferred control as defined in ASC 860-10-40-5.

The Company acknowledges the Staff’s comment and advises the Staff that it has included a table in the following form in its Significant Accounting Policy footnote in the 2024 Form 10-K in order to further clarify its accounting policy for collateral in lending arrangements:

Collateral

Received

Recognition Trigger

Fiat

Fiat collateral is recognized if the Company obtains control of the collateral.

USDC

USDC collateral on fiat and crypto asset loan receivables are recognized only in the event of default. If USDC collateral is sold, the associated proceeds are recognized.

USDC collateral on USDC loans not meeting the recognition criteria is recognized if the Company has the right to sell, pledge, or rehypothecate the collateral.(1)

Crypto assets

Crypto asset collateral is recognized if the Company obtains control of the collateral.(1)

(1)

The Company does not reuse or rehypothecate customer USDC or crypto assets nor grant security interests in such assets, in each case unless required by law or expressly agreed to by the customer.

The Company advises the Staff that the circumstances under which the Company recognizes USDC received as collateral in a wallet for which the Company has the contractual right to sell, pledge, or rehypothecate the collateral are when these assets are collateralizing loans that are denominated in USDC (as opposed to fiat or crypto assets), consistent with treatment of a secured borrowing arrangement in accordance with ASC

860-30-25-7. For example, if the Company received USDC collateralizing a USDC loan receivable (where no USDC was derecognized and no loan receivable was recognized as the lent USDC does not meet the criteria in ASC 860-10-45-5 for derecognition) and the preceding criteria were met, the Company would recognize the USDC as collateral and a corresponding obligation to return collateral.

Further, the Company advises the Staff that the circumstances under which the Company does not recognize USDC received as collateral in a wallet for which the Company has contractual right to sell, pledge, or rehypothecate the collateral are when these assets are collateralizing loans that are denominated in fiat or crypto assets. In these circumstances, on the loan side, the assets are always derecognized and a corresponding loan receivable is recognized, but the Company does not recognize the collateral as collateral unless the borrower defaults. If the collateral is sold, the Company would recognize the proceeds and a corresponding obligation to return collateral, though the Company has not sold collateral to date. This accounting treatment is consistent with transfers of financial assets accounting in accordance with ASC 860-30-25-5. For example, if the Company received USDC collateralizing a fiat loan receivable (fiat loans receivable are always recognized), it would not recognize the

USDC unless the borrower defaulted. In this same example, if the Company sold the USDC collateral and received fiat, it would record the fiat and a corresponding obligation to return collateral. No entry would be recorded if the Company were to pledge or rehypothecate the USDC collateral.

The Company further advises the Staff that there are no circumstances under which the Company only recognizes collateral once a sale of the collateral occurs. As noted above, if the assets are collateralizing fiat or crypto asset loans receivable, the borrower would need to default before the Company recognizes the collateral, or if these assets are sold, then the proceeds (not the actual collateral itself) are recorded along with an accompanying obligation to return collateral.

Regarding the guidance applicable to determining whether the Company has control of crypto assets received as collateral, the Company has determined that the guidance in ASC 350, Intangibles-Goodwill and Other (“ASC 350”) is the most appropriate guidance to apply in this circumstance.

Accordingly, the Company recognizes crypto assets held as collateral utilizing the recognition criteria under ASC 350. Prior to rescission of Staff Accounting Bulletin

(“SAB”) No. 121 (“SAB 121”), the Company presented all crypto assets held as collateral on its platform within safeguarding customer crypto assets and safeguarding customer crypto liabilities.

Upon rescission of SAB 121, the Company has reclassified crypto assets held as collateral that it controls to crypto assets held as collateral on the balance sheet with a corresponding obligation to return collateral.

4. In your response to our prior comment 9 you describe your consideration of the conditions in ASC 860-10-40-5 when USDC is transferred to counterparties under USDC lending arrangements. For transfers of USDC that the Company has concluded should be accounted for as sales under ASC 860, for example in fact patterns in which the Company does not maintain effective control as described in ASC 860-10-40-5(c), please describe the analysis the Company performed to conclude that the transferred USDC would be beyond the reach of your creditors in bankruptcy. For example, please tell us whether for USDC that you derecognize as a result of transferring to a wallet in which you hold the USDC for the benefit of a platform user you have received a true sale opinion consistent with the guidance in ASC 860-10-55-18A and if so, please supplementally provide us with that opinion.

The Company acknowledges the Staff’s reference to ASC 860-10-40-5 in the context of lending arrangements and its request for additional information on when the Company accounts for transfers of USDC as sales under ASC 860. The Company advises the Staff that although it evaluates ASC 860, including 860-10-40-5, in determining the appropriate accounting for its USDC loaned, as disclosed in its significant accounting policy disclosures, it does not account for USDC loaned to customers as sales. USDC loaned to customers is not derecognized from the Consolidated Balance Sheets as the borrower has an obligation to return the same financial assets (USDC) back to the Company in order to release the collateral pledged for the loan. If a lending arrangement is open-ended, there is a call option and written put option on the same or similar asset embedded within the loan.

This constitutes a form of continuing involvement with the USDC transferred and therefore the Company maintains effective control over the USDC as defined in ASC

10-40-5(c). Accordingly, USDC loaned remains recorded in USDC in the Consolidated Balance Sheets.

The Company advises the Staff that for transfers of USDC that the Company accounts for as sales under ASC 860 (e.g., sales of USDC to customers in exchange for fiat), the Company has concluded that the transferred USDC would be beyond the reach of the creditors of Coinbase, Inc. in bankruptcy because USDC constitutes a financial asset credited to a securities account at a securities intermediary within the meaning of Division 8 Uniform Commercial Code as in effect in the State of California (“Division 8”). Accordingly, user claims against Coinbase, Inc. for the return of their digital assets would constitute “security entitlements” for purposes of Division 8. Division 8 provides that financial assets held by a securities intermediary, such as Coinbase, Inc., are not property of the securities intermediary and not subject to the claims of the securities intermediary’s general creditors, in each case to the extent such assets are necessary to satisfy security entitlements with respect to such assets.

The Company further advises the Staff that its user agreement (“User Agreement”) reflects this treatment as set forth below:

“2.7.2 Application of the Uniform Commercial Code. All Supported Digital Assets credited to the Digital Asset Wallet will be treated as “financial assets” under Division 8 of the California Uniform Commercial Code (“Division 8”). Coinbase is a “securities intermediary” as used in Division 8 with respect to Supported Digital

Assets, and your Digital Asset Wallet is a “securities account” as used in Division 8. As stated in Division 8, “the characterization of a person, business, or transaction for purposes of this division does not determine the characterization of the person, business, or transaction for purposes of any other law, regulation, or rule,” including the United States Commodity Exchange Act and any federal, state, or foreign securities law or regulation. Coinbase will comply with your instructions with respect to your Supported Digital Assets, subject to the terms of this User Agreement.”

The User Agreement defines (i) “Digital Asset” as “any digital asset

(including a virtual currency or virtual commodity) which is a digital representation of value based on (or built on top of) a cryptographic protocol of a computer network” and (ii) “Supported Digital Asset” as “only those particular Digital Assets listed as available to trade or custody in your Digital Asset Wallet.” USDC is a Digital Asset within the meaning of the User Agreement.

The Company has obtained legal opinions from outside counsel consistent with the Uniform Commercial Code analysis above. Per the Staff request, the Company is supplementally providing the Staff, under separate cover, with a copy of such opinions and is requesting confidential treatment with respect to such opinions. The Company refers the Staff to the contents of such opinions for further analysis supporting its position.

Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at (310) 434-5403, or, in his absence, Michael Brown at (415) 875-2432.

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We note your response to prior comment 2 and reissue. Please revise disclosure in future filings to provide the address of your principal executive offices. While we note that you are a remote-first company and you have provided the address of your agent for service of process, identification of a principal executive office is a requirement of Form 10-K.

The Company acknowledges the Staff’s comment and advises the Staff that as described in the

Company’s response to prior comment 2, since May 2020 the Company has been, and continues to be, a remote-first company with no headquarters or principal executive offices. As previously noted, the Company’s employees are distributed across over 40 states and ten countries, the Company’s executive team and Board of Directors (the “Board”) are geographically distributed, and meetings of the executive team and the Board are generally held virtually.

However, in response to the Staff’s comment, the

Rest of the answer

Company advises the Staff that the Company has initiated a process to identify an address to satisfy the principal executive offices requirement for purposes of its filings with the Commission and will disclose such address in the Company’s future filings with the Commission no later than the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Part I

Item 1. Business,

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We note your response to prior comment 3 and reissue in part. In future filings please summarize the information provided in your response letter regarding your various digital engagement practices, investment education tools, optimization functions, and data collection practices. Please also revise to add a risk factor discussing potential conflicts of interest that may result from the use of optimization functions.

The Company acknowledges the

Staff’s comment and advises the Staff that the Company will update Part I, Item 1 of the 2024 Form 10-K to disclose the material elements of the Company’s digital engagement practices, investment education tools, optimization functions, and data collection practices. The Company further advises the Staff that the Company will include a risk factor in substantially the form as follows in its future filings with the Commission beginning with the Company’s Quarterly

Report on Form 10-Q for the quarter ended March 31, 2024 (the “Q1 2024 Form 10-Q”):

“Laws and

Rest of the answer

regulations regarding conflicts of interest associated with the use of predictive data analytics, digital engagement practices, and similar technologies, if adopted and found to be applicable to our business, may require us to modify, limit, or discontinue our use of certain technologies and features contained within our products and services and may impact the way that we interact with existing and prospective customers, which could adversely affect our business, operating results, and financial condition.

We utilize a variety of predictive data analytics, digital engagement practices, and similar technologies in connection with certain of our products and services, such as recommendations, notifications, educational content, and relevant news, which are primarily designed to promote financial literacy and awareness and to provide customers with guidance and information to help them make better informed decisions about their crypto activity. Certain jurisdictions have proposed or are considering laws and regulations regarding conflicts of interest associated with the use of predictive data analytics, digital engagement practices, and similar technologies by broker-dealers, investment advisers and/or other securities market participants. For example, in July 2023 the SEC proposed rules (the “July 2023 Rule Proposals”) that would impose new obligations on broker-dealers and investment advisers registered, or required to be registered, with the SEC with respect to conflicts of interest associated with the use of predictive data analytics and similar technologies when interacting with investors. We do not believe that the July 2023 Rule Proposals, if adopted as proposed, would apply to our business, although the SEC has alleged in the June 2023 SEC Complaint that we have acted as an unregistered broker. If the July 2023 Rule Proposals were to be adopted (as proposed or otherwise) and found to apply to our business, or if similar rules were to be adopted and found to apply to our business in any other jurisdiction in which we operate, we may be required to modify, limit, or discontinue our use of certain technologies and features contained within our products and services and/or to change the way that we interact with existing and prospective customers. The adoption of such laws or regulations in the jurisdictions in which we operate could, if they are deemed to apply to our business, adversely affect our business, operating results, and financial condition.”

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We note your response to prior comment 7. Given the growth of your staking business, in future filings please expand disclosure in this section regarding your staking program, discussing how the staking process operates, how you provide services and generate revenue from that process, your custodial practices for staked crypto assets, a brief description of your cbETH product, and how your arrangements with

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customers are structured.

The Company acknowledges the Staff’s comment and advises the Staff that the Company will update Part I, Item 1 of the 2024 Form 10-K to disclose additional material elements of the Company’s staking program. Read in the reply ↗

We note that your Coinbase Asset Management offering utilizes both Coinbase and third parties as custodians. In future filings please revise to identify such third party custodians and describe the material terms of any agreements you have with them.

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Additionally please clarify your disclosure on page 12 that you "do not use sub-custodians in connection with the storage of digital assets" to explain what you mean by this in light of your disclosure regarding the use of third party custodians.

The Company acknowledges the Staff’s comment and advises the Staff that a third-party custodian is not the same as a sub-custodian. The reference to “sub-custodians” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) is intended to describe an arrangement whereby one custodian, which the Company identifies as the “sub-custodian,” holds assets on behalf of another custodian.

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The Company does not use third-party sub-custodians in connection with the storage of digital assets, including through Coinbase

Asset Management (“CBAM”) or any of its products. For clarification, certain CBAM clients enter into direct contractual relationships with third parties to custody their assets (“CBAM Third Parties”), but this does not result in a “sub-custodian” arrangement. The Company further advises the Staff that the Company will update Part 1, Item I of the 2024 Form 10-K to clarify what it means by “sub-custodian.”

The Company further advises the Staff that under Staff Accounting Bulletin No. 121 (“SAB 121”), the definition of the term “safeguard” is far broader than the way the term “custody” is normally understood and includes crypto assets CBAM’s clients hold at the CBAM Third Parties. Consequently, even though neither the Company nor its affiliates custody the crypto assets held at the CBAM Third Parties, pursuant to SAB 121, such assets are reported in the Company’s financial statements included in its filings with the Commission as safeguarding crypto assets. These crypto assets represented less than 1% of the total crypto assets safeguarded by the Company and were responsible for less than 1% of the Company’s total revenue for the year ended December 31, 2023 and for the quarter ended March 31,

2024. Accordingly, the Company does not believe information concerning the CBAM Third Parties, the agreements with these parties, or their identity is material to an investor in the Company. However, some of this information, including the identity of the CBAM Third Parties, is publicly disclosed on CBAM’s Form ADV, which is accessible on the Investment Adviser Public Disclosure page of the Commission’s website at https://adviserinfo.sec.gov/. Moreover, the Company will continue to evaluate its disclosure as it relates to CBAM’s advisory business in its future filings with the Commission to the extent any of CBAM’s offerings become material.

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We note your response to prior comments 41 and 42. In particular, we note your disclosure on pages 17 and 38 that “[t]here is currently no certainty under the SEC’s application of the applicable legal test as to whether particular crypto assets, products or services” are securities.

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In future filings please revise your disclosure to clarify that the Commission and courts have identified numerous crypto assets, products and services as securities. Please also remove the statement on page 38 that “the SEC’s views in this area have evolved over time,” consistent with other revisions you made in response to our prior comments. In addition, refer to your statement that "[t]he legal test for determining whether any given crypto asset, product or service is a security was set forth in the 1946 Supreme Court case SEC v. W. J. Howey Co.” We note that crypto assets, products and services can be securities other than investment contracts, such as notes. In future filings please revise your disclosure accordingly.

The Company acknowledges the Staff’s comment and advises the Staff that the Company will update Part I, Item 1 of the 2024 Form

10-K in substantially the form as follows (new text in blue, deletions in red):

“In recent years, the SEC and U.S. state securities regulators have stated that certain digital assets or digital asset products may be classified as securities under U.S.

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federal and state securities laws, and in the case of the SEC, has made public statements on this topic – however, these statements are not binding or definitive guidance, and there is currently no certainty under the SEC’s application of the applicable legal test as to whether particular crypto assets, products, or services would be deemed securities. Though the SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given crypto asset is a security in April 2019, this framework is also not a rule, regulation, or statement of the SEC and is not binding on the SEC. A number of enforcement actions and regulatory proceedings have since been initiated against digital assets and digital asset products and their developers and proponents, as well as against trading platforms that support digital assets. The SEC has characterized a number of crypto assets, products, and services as securities in these regulatory proceedings and enforcement actions, including an enforcement action brought against the Company. The SEC has stated more recently that a crypto asset itself is not a security, but there is uncertainty and inconsistency in the courts that have grappled with the issue of whether or how certain crypto asset transactions could be deemed securities, and no appellate court has yet addressed the issue. Several foreign governments have also issued similar warnings cautioning that digital assets may be deemed to be securities under the laws of their jurisdictions.

We have established policies and practices to evaluate each crypto asset we consider for listing or for custody and are a founding member of the Crypto Rating Council, a member-owned and operated organization whose purpose is to assess whether any given crypto assets, or whether the development, issuance, and use of such assets, have characteristics that make them more or less likely to implicate U.S. federal securities laws. We also evaluate all other products and services prior to launch under U.S. federal and applicable international securities laws.”

The Company further advises the Staff that the Company will update its risk factor disclosure in its future filings with the Commission beginning with the Q1 2024 Form 10-Q in substantially the form as follows (new text in blue, deletions in red):

“A particular crypto asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.

The SEC and its staff have taken the position that a range of crypto assets, products, and services fall within the definition of a “security” under the U.S. federal securities laws. Despite the SEC being the principal federal securities law regulator in the United States, whether or not an asset, product, or service is a security or constitutes a securities offering under federal securities laws is ultimately determined by a federal court. The legal test for determining whether any given crypto asset, product, or service is an investment contract security was set forth in the 1946 Supreme

Court case SEC v. W.J. Howey Co. and whether any given crypto asset, product, or service is a note in the 1990 Supreme Court case Reves v. Ernst & Young. The legal tests for determining whether any given crypto asset, product, or service is a security requires a highly complex, fact-driven analysis. Accordingly, whether any given crypto asset, product, or service would be ultimately deemed to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset, product, or service could be deemed a “security” or “securities offering” under applicable laws. The SEC generally does not provide advance guidance or confirmation on its assessment of the status of any particular crypto asset, product, or service as a security. Furthermore, in our SEC’s views in this area have evolved over time, and, at times,view, statements by the SEC and its staff have appeared contradictory at times. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the approach to enforcement by the SEC and its staff.”

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We note your response to prior comment 44 and your disclosure that the total value of crypto assets in your possession and control is “significantly greater” than the total value of insurance coverage that would compensate you in the event of theft or other loss of funds.

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Please revise this risk factor in future filings to describe your limited coverage in greater detail, including, to the extent accurate, that you may be liable for the full amount of losses suffered, which could be greater than all of your remaining assets. Additionally, please disclose in future filings the term of your insurance policy or policies and any renewal options.

The Company advises the Staff that the Company will update its risk factor disclosure in its future filings with the Commission beginning with the Q1 2024 Form 10-Q in substantially the form as follows (new text in blue, deletions in red):

“The theft, loss, or destruction of private keys required to access any crypto assets held in custody for our own account or for our customers may be irreversible.

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If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any crypto assets, it could cause regulatory scrutiny, reputational harm, and other losses.

Crypto assets are generally controllable only by the possessor of the unique private key relating to the digital wallet in which the crypto assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the crypto assets held in such a wallet. To the extent that any of the private keys relating to our wallets containing crypto assets held for our own account or for our customers is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access the crypto assets held in the related wallet. Further, we cannot provide assurance that our wallets will not be hacked or compromised. Crypto assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or hack or other compromise of, digital wallets used to store our customers’ crypto assets could adversely affect our customers’ ability to access or sell their crypto assets, require us to reimburse our customers for their losses, and subject us to significant financial losses in addition to losing customer trust in us and our products. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. We have for years maintained, and continue to maintain, a commercial crime insurance policy, which has a one-year term without automatic renewals. The crypto insurance market is limited, and therefore, the level of insurance maintained by us may not be available or sufficient to protect us or our customers from all possible losses or sources of losses, and such losses may exceed our remaining assetsThe total value of crypto assets in our possession and control is significantly greater than the total value of insurance coverage that would compensate us in the event of theft or other loss of funds, which could cause our business, operating results, and financial condition to be adversely impacted in the event of such uninsured loss.”

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We note your response to prior comment 46. Please describe for us in greater detail the current functionality of the NFT marketplace and your plans for future phases or development of the marketplace.

The Company advises the Staff that while the Coinbase NFT marketplace remains operational, and users can still buy, sell, transfer, and mint NFTs, the Company has no current plans to develop or launch any new functionality related to the NFT marketplace. The Company further advises the Staff that the Company currently does not monetize, and therefore derives no revenue, from such NFT marketplace. As a result, the Company does not believe additional information regarding the Coinbase NFT marketplace would be meaningful for investors of the Company. Read in the reply ↗

We note your response to prior comment 47. In future filings please provide summary- level disclosure in your business section of your lending and borrowing activities.

The Company acknowledges the Staff’s comment and advises the Staff that the Company will update Part I, Item 1 of the 2024 Form 10-K to provide summary-level disclosure regarding the material elements of the Company’s lending and borrowing activities. The Company further advises the Staff that it will enhance its disclosure regarding the Company’s lending and borrowing activities in the Note titled “Collateralized Arrangements and Financing” of the Notes to the Company’s condensed consolidated financial statements in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q. Read in the reply ↗

We note your response to prior comment 50 and reissue in part. In future filings please update your disclosure to reflect your response to this comment relating to blockchain tokens.

The Company advises the

Staff that the Company will update its risk factor disclosure in its future filings with the Commission beginning with the Q1 2024 Form 10-Q in substantially the form as follows (new text in blue, deletions in red):

“We might require additional capital to support business growth, and this capital might not be available.

We have funded our operations since inception primarily through debt, equity financings and revenue generated by our products and services.

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We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments in our business, including developing new products and services, enhancing our operating infrastructure, expanding our international operations, and acquiring complementary businesses and technologies, all of which may require us to secure additional funds. Additional financing may not be available on terms favorable to us, if at all, including due to general macroeconomic conditions, crypto market conditions and any disruptions in the crypto market, instability in the global banking system, increasing regulatory uncertainty and scrutiny or other unforeseen factors. In the event of a downgrade of our credit rating, our ability to raise additional financing may be adversely affected and any future debt offerings or credit arrangements we propose to enter into may be on less favorable terms or terms that may not be acceptable to us. In addition, even if debt financing is available, the cost of additional financing may be significantly higher than our current debt. If we incur additional debt, the debt holders would have rights senior to holders of our common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock.

Furthermore, we have authorized the issuance of “blank check” preferred stock and common stock that our board of directors could use to, among other things, issue shares of our capital stock in the form of blockchain tokens, implement a stockholder rights plan, or issue other shares of preferred stock or common stock. We may issue shares of capital stock, including in the form of blockchain tokens, to our customers in connection with customer reward or loyalty programs. If we issue additional equity securities, including in the form of blockchain tokens, stockholders will experience dilution, and the new equity securities could have rights senior to those of our currently authorized and issued common stock.

We do not currently have any specific plans to issue shares of our capital stock in the form of blockchain tokens. The trading prices for our common stock may be highly volatile, which may reduce our ability to access capital on favorable terms or at all. In addition, a slowdown or other sustained adverse downturn in the general economic or crypto asset markets could adversely affect our business and the value of our Class A common stock. Because our decision to raise capital in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests. Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.”

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We note your response to prior comment 4 and your disclosure of revenue disaggregated by geography in Note 5 on page 154 to your financial statements. Please address the following: • Tell us whether revenue derived from outside the United States is concentrated in any revenue source, and if so, please discuss that fact in your MD&A.

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We also note that revenues from customers not domiciled in the United States decreased 66% and 25% for each of the years ended December 31, 2022 and 2023. • Please also revise future filings to disclose whether these decreases are a known trend and your expectations of this trend continuing or changing in future financial periods. Refer to Item 303(b)(2)(ii) of Regulation S-K.

The Company advises the Staff that revenue derived from outside the United States, or international revenue, has historically been and is currently concentrated within transaction revenue. The Company will include disclosure in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, identifying any such concentration.

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The Company further advises the Staff that the Company does not view the decrease in international revenue for each of the years ended December 31, 2022 and 2023 as a material known trend or uncertainty that has had or is reasonably likely to have a material favorable or unfavorable impact on revenue. As such, the Company respectfully advises the Staff that the Company has considered and does not believe related disclosure is currently necessary to satisfy its disclosure obligations under Item 303(b)(2)(ii) of Regulation S-K. International revenue has fluctuated on a historical basis, as disclosed in the Company’s revenue by geographic location disclosure in its financial statements included in prior filings with the Commission, and the Company expects it will fluctuate in the future. In fact, over the nine quarters ended March 31, 2024, international revenue increased in four quarters and decreased in five quarters, with no material resultant known trend. Should a material known trend appear here in the future, the Company advises the Staff that it will include related disclosures in its filings with the Commission in accordance with Item 303(b)(2)(ii) of Regulation S-K at that time.

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We note that you attribute the decline in transaction revenue from $2.4 billion in 2022 to $1.5 billion in 2023 to a $1.2 billion reduction in consumer transaction volume offset in part by an increase of $418.8 million attributable to changes in customer mix towards higher fee trades.

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Considering the offsetting impact of approximately 35% and $418.8 million on the $1.2 billion reduction in year-over-year consumer transaction revenue of 55% from higher fee trades, please tell us how your existing disclosures capture the change in underlying trends and your consideration of disaggregating trading volume between fee levels. Refer to Item 303(b)(2)(ii) of Regulation S-K.

Staff’s comment and advises the Staff that the Company believes the existing disclosures included in its filings with the Commission, which describe the impact of Trading Volume (as defined in the 2023 Form 10-K) and pricing changes, including the Company’s average blended fee rate, on transaction revenue, provide investors with a comprehensive understanding of the material changes in the Company’s transaction revenue from period to period.

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For example, in the 2023 Form 10-K, the Company identified the primary components resulting in the $0.8 billion decline in transaction revenue for the year ended December 31, 2023 as compared to the year ended December 31, 2022:

a $1.2 billion reduction in consumer transaction revenue attributed to a corresponding 55% decrease in consumer

Trading Volume, and a $418.8 million increase attributed to changes in customer mix towards trades which have higher fees and pricing changes resulting in a 41% increase in average blended fee rate.

The Company believes that disaggregating Trading Volume between fee levels would not provide meaningful additional disclosure to investors and would potentially be confusing to investors because (i) the Company already provided the overall impact of the higher fees and pricing changes in its disclosures, which drove the partial offset to the Company’s decreased transaction revenue, (ii) the Company has many different offerings and pricing levels, and (iii) the Company changes its pricing strategy from time-to-time across its offerings. Moreover, such detailed pricing information is competitively sensitive and the Company is not aware of other companies in or outside its industry providing similar granular disclosure. Therefore, because the Company believes disclosure of disaggregated Trading Volume between fee levels may be competitively harmful while not providing materially helpful information to investors, the Company advises the Staff that it has considered and believes that disaggregating Trading Volume between fee levels is not necessary to satisfy its disclosure obligations under Item 303(b)(2)(ii) of Regulation S-K.

The Company also advises the Staff that the disclosed changes in revenue attributable to price and Trading Volume do not represent material known trends or uncertainties that have had or are reasonably likely to have a material favorable or unfavorable impact on revenue, and as such, the

Company has not made any related disclosures in accordance with Item 303(b)(2)(ii) of Regulation S-K. As described in the periodic filings the Company makes with the Commission, including in the Risk Factors, Quantitative and Qualitative

Disclosures About Market Risks, and Key Business Metrics sections of the 2023 Form 10-K, the Company’s revenue may be volatile, including due to underlying fluctuations in Trading Volume and pricing. In fact, over the nine quarters ended

March 31, 2024, sequentially, Trading Volume increased in two quarters, decreased in six quarters, and was flat in one quarter, with no material resultant known trend. Investors are able to see these changes in the Company’s disclosed Key

Business Metrics within Management’s Discussion and Analysis and Results of Operations included in the Company’s filings with the Commission. Should a material known trend appear here in the future, the Company advises the Staff that it will include related disclosures in its filings with the Commission in accordance with Item 303(b)(2)(ii) of Regulation S-K at that time.

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We note the statement in your Fourth Quarter and Full-Year 2023 Shareholder letter that on a year-over-year basis asset under custody inflows were approximately $7 billion. Given the ongoing growth in your custody business, please tell us your consideration of disclosing your assets under custody as of each period presented.

The Company respectfully advises the Staff that the Company discloses safeguarding customer crypto assets – a portion of which constituted the assets under custody referenced in the Company’s Fourth Quarter and Full-Year 2023 Shareholder letter (the “2023 Shareholder Letter”) – within the Note titled “Customer Assets and Liabilities” of the Notes to the Company’s consolidated financial statements in its periodic filings with the Commission, including in Note

10 of the 2023 Form 10-K.

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The Company also discloses safeguarding customer crypto assets by asset for each asset type that is greater than 5% of the Company’s total safeguarding customer crypto assets recorded within this Note in its periodic filings with the Commission, including in Note 10. Customer Assets and Liabilities of the Notes to the Company’s consolidated financial statements included in the 2023 Form 10-K.

Of the $192.6 billion in safeguarding customer crypto assets disclosed as of December 31, 2023, $101 billion, or 52%, were held within the Company’s cold storage solutions offered by the Company’s subsidiaries, Coinbase Custody International Limited (“CCIL”) and Coinbase Custody Trust Company (“CCTC”), a qualified custodian. The $7 billion in the Staff’s comment refers to net inflows of these assets held with CCIL and CCTC during the year ended December 31, 2023. Given the disclosure in Note 5. Revenue of the Notes to the Company’s consolidated financial statements included in the 2023 Form 10-K, the Company did not believe it was necessary to bifurcate assets under custody specifically for CCTC and CCIL because the associated revenue from such offering has historically not been material. For example, custodial fee revenue was 2% of the Company’s total revenue for the year ended December 31, 2023, as disclosed in Note 5. Revenue of the Notes to the Company’s consolidated financial statements included in the 2023 Form 10-K, and management believes its disclosure included in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Form 10-K provides investors with adequate explanation of the material changes in the Company’s custodial fee revenue. Beyond disclosures of safeguarding customer crypto assets under SAB 121 and an evaluation of materiality, the Company is not aware of any rules requiring disclosure of assets under custody specifically. The Company will continue to evaluate its disclosure as it relates to safeguarding customer crypto assets in its future filings with the Commission. The Company further advises the Staff that, to the extent the Company discloses “assets under custody” in future shareholder letters, the Company will clarify its definition.

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We note your response to prior comment 13 and your enhanced disclosures on page 92. Please revise future filings to enhance your overall market disclosure to elaborate on how specific items impact the overall market.

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For example, in your disclosure you indicate the temporary de-pegging of USDC contributed to the decline in market volatility, and you also note that de-pegging events drove increases in USDT trading volume. However, it is unclear from your disclosure why de-pegging would contribute to the market trends you discuss.

The Company advises the Staff that it will enhance its overall market disclosure in its future filings with the Commission to further elaborate as to how specific items impact the overall market, beginning with the Q1 2024 Form 10-Q. Read in the reply ↗

We note your response to prior comment 15. Please address the following with respect to your response and revised disclosure: • Please expand on why you believe Adjusted EBITDA is useful in evaluating your operating performance.

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In your response, please explain why your adjustment to exclude impairment charges on crypto assets results in a measure that is useful in evaluating your performance despite how integral crypto assets are to your business. • In your response you indicate that you exclude certain non-cash charges from Adjusted EBITDA to provide investors with supplemental information with respect to the Company’s liquidity. If Adjusted EBITDA is meant to provide investors with supplemental information with respect to your liquidity, tell us how you have determined that adjustments that directly impact the liquidation value of crypto assets still held, derivatives, net, investments, net and other adjustments, net comply with Item 10(e)(1)(ii)(A) of Regulation S-K. See also Question 102.09 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. • In your response you state that while crypto asset impairment, net is a recurring charge, it is appropriately excluded from the Company’s Adjusted EBITDA because it is a non-cash expense. Please tell us why crypto assets received as revenue and crypto asset payments for expenses, which appear to also be recurring non-cash items, are not similarly excluded from your calculation of Adjusted EBITDA. • Please tell us the nature of the items included in your “other adjustments, net” adjustment. In your response, please provide us with a schedule of the individual items included in this adjustment for each period presented. • Please tell us how your (gain)loss on investments, net adjustment reconciles to the similarly titled line item in your Consolidated Statements of Cash Flows. • Tell us how you determined that non-recurring accrued legal contingencies, settlements and related costs are not recurring when you have recognized such adjustments for each of the three years presented. In your response, please clarify how such amounts reconcile to the amounts recognized in the consolidated statements of operations and why you have only adjusted for select items. Please refer to Item 10(e)(1)(ii) of Regulation S-K and Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. • Tell us what the Adjusted EBITDA measure reflects compared to GAAP cash flows provided by (used in) operating activities and net income and how this measure is useful to investors in evaluating your on-going operations, considering also that the measure does not exclusively include or exclude cash and/or non-cash activity.

you indicate that you exclude certain non-cash charges from Adjusted EBITDA to provide investors with supplemental information with respect to the Company’s liquidity. If Adjusted EBITDA is meant to provide investors with supplemental information with respect to your liquidity, tell us how you have determined that adjustments that directly impact the liquidation value of crypto assets still held, derivatives, net, investments, net and other adjustments, net comply with Item 10(e)(1)(ii)(A) of Regulation S-K.

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See also Question 102.09 of the Non-GAAP

Financial Measures Compliance and Disclosure Interpretations.

In your response you state that while crypto asset impairment, net is a recurring charge, it is appropriately excluded from the Company’s Adjusted EBITDA because it is a non-cash expense. Please tell us why crypto assets received as revenue and crypto asset payments for expenses, which appear to also be recurring non-cash items, are not similarly excluded from your calculation of Adjusted EBITDA.

Please tell us the nature of the items included in your “other adjustments, net” adjustment. In your response, please provide us with a schedule of the individual items included in this adjustment for each period presented.

Please tell us how your (gain)loss on investments, net adjustment reconciles to the similarly titled line item in your Consolidated Statements of Cash Flows.

Tell us how you determined that non-recurring accrued legal contingencies, settlements and related costs are not recurring when you have recognized such adjustments for each of the three years presented. In your response, please clarify how such amounts reconcile to the amounts recognized in the consolidated statements of operations and why you have only adjusted for select items. Please refer to Item 10(e)(1)(ii) of Regulation S-K and Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations.

Tell us what the Adjusted EBITDA measure reflects compared to GAAP cash flows provided by

(used in) operating activities and net income and how this measure is useful to investors in evaluating your on-going operations, considering also that the measure does not exclusively include or exclude cash and/or non-cash activity.

The Company advises the Staff that as noted in the Company’s disclosure regarding Adjusted EBITDA in its periodic filings with the Commission, the Company’s presentation of Adjusted EBITDA should not be considered in isolation of or as a substitute for financial information presented in accordance with U.S. generally accepted accounting principles

(“GAAP”). To that end, Adjusted EBITDA is not intended to replace net income or any other financial line items presented in the Company’s consolidated statements of operations. Instead, the Company believes Adjusted

EBITDA, a non-GAAP financial performance measure, is additional useful information to help investors evaluate the Company’s operating performance because it enables investors to compare this measure and component adjustments to similar information provided by peer companies and the Company’s past financial performance, provides additional company-specific adjustments for certain items that may be included in income from operations but that the Company does not consider to be normal, recurring, operating expenses (or income) necessary to operate the Company’s business given the Company’s operations, revenue generating activities, business strategy, industry, and regulatory environment, and provides investors with visibility to a measure management uses to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. More specifically, the Company discloses Adjusted EBITDA for the following reasons:

Adjusted EBITDA excludes certain non-cash expenses, such as depreciation and amortization and stock-based compensation, which, as noted below, are commonly excluded by other companies from their Adjusted EBITDA metric, to give management a better understanding of the Company’s performance in a particular period, and to facilitate comparison with peer companies.

Adjusted EBITDA excludes certain items that the Company does not consider to be normal, recurring, cash operating expenses. For example, the Company excludes (i) other (income) expense, net as the income and expenses recognized within this line item are not part of the Company’s core operating activities and are considered non-operating activities under GAAP, (ii) beginning with the Q1 2024 Form 10-Q, gains and losses on crypto assets held for investment (post-adoption of ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets (“ASU

2023-08”)) with respect to crypto assets held for investment because, as noted in the Company’s prior periodic filings with the Commission, such investments are considered long-term holdings, the Company does not plan on engaging in regular trading of crypto assets, and, as an operating company, the Company’s investing activities in crypto are not part of the Company’s revenue generating activities, which are based on transactions in crypto assets that occur on the

Company’s platform and the sales of subscriptions and services, and (iii) the impact of the restructurings that the Company conducted in 2022 and 2023 that are not related to the Company’s normal business operations.

The Company’s management uses Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of its annual operating budget, as a measure of its core operating results and the effectiveness of its business strategy, and in evaluating its financial performance and, as a result, the Company believes it is important for investors to also have this information, which management uses to manage its business.

Adjusted EBITDA provides consistency and comparability with the Company’s past financial performance, facilitates period-to-period comparisons of the Company’s core operating results, and with other companies, including companies in the Company’s industry, making it a useful tool for investors. The Company notes that the material adjustments that the Company makes to Adjusted EBITDA are comparable to those of peer companies, further facilitating comparability.

Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, interest expense, other (income) expense, net, restructurings, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.

The Company notes to the Staff that it has clearly outlined the limitations of Adjusted EBITDA in its filings with the Commission. Moreover, the Company advises the Staff that it will update its disclosure in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, to expand on why it believes Adjusted EBITDA is useful in evaluating its operating performance.

With respect to impairment charges on crypto assets specifically, as previously stated in the Company’s response to prior comment 15, the

Company believes including these charges in the calculation of Adjusted EBITDA without including equal consideration of subsequent increases in market values results in an incomplete assessment of the Company’s crypto asset holdings and may provide investors an imbalanced picture of the economic impact of changes in values of crypto assets on the Company’s results of operations. With the adoption of ASU 2023-08 effective January 1, 2024, the Company believes the accounting rules provide a more balanced presentation. Accordingly, while an adjustment for crypto asset impairment, net will continue to be reflected in the Company’s presentation of Adjusted EBITDA for historical periods as a result of the former accounting rules that were in effect during such historical period, the Company will not include such an adjustment on a prospective basis for the presentation of future periods as a result of the

Company’s adoption of ASU 2023-08. As a result of the Company’s adoption of the new accounting standard, the Company advises the Staff that it only intends to include an adjustment for the subset of the gain or loss on crypto assets under ASU 2023-08 that relate to crypto assets held for investment, because, as noted in the Company’s prior periodic filings with the Commission, such investments are considered long-term holdings, the Company does not plan on engaging in regular trading of crypto assets and, as an operating company, the Company’s investing activities in crypto are not part of the Company’s revenue generating activities, which are based on transactions in crypto assets that occur on the Company’s platform and the sales of subscriptions and services. Furthermore, this treatment is consistent with the exclusion of gains and losses from the Company’s non-crypto investments that are currently reflected within other (income) expense, net. The Company considers all other gains or losses on crypto assets to be core to the Company’s operations and includes these in its calculation of income from operations, and therefore the Company will not adjust for any such gain or loss in its calculation of Adjusted EBITDA for prospective periods.

The Company advises the Staff that it will update its presentation of Adjusted EBITDA in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, to: (i) reflect the Company’s adoption of ASU 2023-08, (ii) simplify the Company’s presentation of Adjusted EBITDA by combining certain adjustments in the Company’s calculation of Adjusted EBITDA that are, and have been historically, presented within other (income) expense, net in the Company’s consolidated statements of operations, into one adjustment within other (income) expense, net, and (iii) remove certain items from Adjusted EBITDA, including certain items that previously were within other adjustments, net.

The Company advises the Staff that Adjusted EBITDA is a performance measure. As noted above, in addition to various non-cash expenses,

Adjusted EBITDA specifically is intended to exclude certain cash income and expenses that are either non-recurring or not reflective of the Company’s core business operations. The Company also does not exclude all non-cash items from its

Adjusted EBITDA metric, such as crypto assets received as revenue and crypto asset payments for expenses, as noted below, because they constitute normal, recurring, operating expenses (and income) necessary to operate the Company’s business given the Company’s operations, revenue generating activities, business strategy, industry, and regulatory environment. The Company excludes non-cash expenses, such as depreciation and amortization and stock-based compensation, which are commonly excluded by other companies from their Adjusted EBITDA metric, to give management a better understanding of the Company’s performance in a particular period, and to facilitate comparison with peer companies. Accordingly, management does not view Adjusted EBITDA to be a liquidity measure. The Company further notes that in its periodic filings with the Commission it has consistently referred to Adjusted EBITDA as a measure used to evaluate its operating performance and that the

Company has not referred, and will not in future periodic filings with the Commission refer, to Adjusted EBITDA as a liquidity measure.

Because the Company views Adjusted EBITDA to be a measure of the Company’s performance and not a measure of liquidity, the Company does not believe that Item 10(e)(1)(ii)(A) of Regulation S-K and Question 102.09 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations apply. Therefore, the Company believes that the adjustments the Staff noted for crypto assets still held, derivatives, net, and other adjustments, net would not be precluded by reference to these rules. Moreover, as the Company notes in the other responses to this comment, it is modifying its definition of Adjusted EBITDA to remove certain of the noted items, including other adjustments, net, from its future filings with the Commission.

Crypto assets received as revenue and crypto asset payments for expenses are not excluded in the Company’s calculation of Adjusted EBITDA because they are normal, recurring, operating expenses (and income) necessary to operate the Company’s business given the Company’s operations, revenue generating activities, business strategy, industry, and regulatory environment. In addition, the Company notes that crypto assets received as revenue and crypto asset payments for expenses meet the definition under ASU 2023-08 to be treated like cash as they are converted to cash nearly immediately. The Company further notes to the Staff that, as further discussed above, the Company will not include an adjustment for crypto asset impairment, net, on a prospective basis for the presentation of future periods as a result of the Company’s adoption of ASU 2023-08.

The Company disclosed in the last bullet in the introduction to the Adjusted EBITDA table in its prior filings with the Commission the nature of the items included in the “other adjustments, net” row. These represented miscellaneous items that management considered not normal, recurring, operating expenses (or income) necessary to operate the Company’s business given its operations, revenue generating activities, business strategy, industry, and regulatory environment, which were consolidated into the line item “other adjustments, net” because they are not material individually or in the aggregate.

With respect to the previously titled “other adjustments, net” adjustment, beginning with the Q1 2024 Form 10-Q, the Company will revise its calculation of Adjusted EBITDA by (i) reclassifying out of this item anything that is included in “other (income) expense, net” to the new item so titled, (ii) reclassifying non-recurring lease charges, which relates to an extraordinary exit payment made in connection with a significant lease that is not expected to recur, to the new item so titled, and (iii) removing any other item that was previously included in this item. Prior periods have been recast for comparability.

The Company has provided below a table which shows each item included in the “(Gain) loss on investment, net” rows in the consolidated statements of cash flows and the calculation of Adjusted EBITDA for the year ended December 31, 2023, as an illustrative example of the differences in presentation between these line items. However, the

Company has changed its presentation of these items within the Adjusted EBITDA, beginning with the Q1 2024 Form 10-Q, including removing the (gain) loss on investments row, and therefore we also direct the Staff to the new presentation in the Q1

2024 Form 10-Q.

Item

Statement of

Cash Flows Line

2023

Cash Flows

Adjusted

EBITDA Line

2023 Adj

EBITDA

Non-cash investment impairment expense

Investment impairment expense

$

29,375

(Gain) loss on investments, net

Total investment impairment expense

29, 375

Other non-cash and non-recurring accounting gains and losses on sales of investments which are not part of the core operations of the Company

(50,121

)

Total (gain) loss on investments, net

(20,826

The Company advises the Staff that it has not included all legal contingencies, settlements, and related costs as adjustments, only those that the Company considers to not be normal, recurring, cash operating expenses necessary to operate its business given the Company’s operations, revenue generating activities, business strategy, industry, and regulatory environment. The legal adjustments included for each of the three years ended December 31, 2023 are distinct matters that did not recur and, at the time excluded, were not reasonably likely to recur within two years. Specifically, the Company evaluates whether a legal contingency, settlement or related costs are outside of the ordinary course based on the following criteria:

frequency of similar cases that have been brought to date, or are expected to be brought within two years;

complexity of the case (e.g., regulatory, consumer, intellectual property, or additional types of claims);

nature of the remedy(ies) sought, including size of any monetary damages sought;

offensive versus defensive posture of the Company;

counterparty involved; and the Company’s overall litigation strategy.

The substantial majority of the expenses excluded for the three years ended December 31,

2023 included in this item related to the Company’s $50.0 million settlement with the New York Department of Financial Services (“NYDFS Settlement”). That NYDFS Settlement is excluded from Adjusted EBITDA because it represents the Company’s largest settlement to date, the Company had not, prior to such settlement (and to date, has not), incurred any significant settlement, including with any regulatory agency, and the Company does not expect similar settlements to recur in the future. None of the other settlements, which the Company considered outside of the ordinary course at the time such items were excluded, were material individually or in the aggregate.

As noted above, the Company does not view Adjusted EBITDA to be a liquidity measure and, as a result, such measure should not be compared to cash flows provided by (used in) operating activities. The Company refers the Staff to its response to the first bullet of the Staff’s comment above regarding why the Company believes such measure is useful to investors in evaluating its ongoing operating performance, including excluding certain non-cash expenses, such as depreciation and amortization and stock-based compensation, which are commonly excluded by other companies from their Adjusted EBITDA metric, as well as excluding certain cash income and expenses that are either non-recurring or not reflective of the Company’s core business operations, in each case to give management a better understanding of the Company’s performance in a particular period.

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Please address the following with respect to your response to prior comment 19 and your revised disclosure. • We note your derivative notional balances changed materially from December 31, 2022 to December 31, 2023 and the year-over-year income statement impact was $107 million.

Rest of the question

Please revise future filings to address your general derivative strategies including any changes thereto and quantify the financial statement impact resulting from your derivative financial instruments. Refer to Item 305(b) of Regulation S-K. • In the proposed disclosure in your response, you state you recognized impairment charges related to strategic investments of $329.2 million in 2021. Please tell us how this amount reconciles to the impairment charge of $19.6 million reflected in your table on page 104.

The Company advises the Staff that in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, it will update the section titled “Quantitative and Qualitative Disclosures about Market Risk” to address the Company’s general derivative strategies and any changes thereto and to provide a quantification of the financial statement impact resulting from the Company’s derivative financial instruments.

The Company advises the Staff that its response to prior comment 19 inadvertently referenced $329.2 million, which represented gross impairment charges on crypto assets held

Rest of the answer

versus gains on strategic investments, which were $19.6 million for the same period. However, the Company also advises the Staff that the figures provided for each of gross impairment charges on crypto assets and gains on strategic investments were correct in the 2023 Form 10-K.

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We note your adjustment of crypto assets received as revenue in your consolidated statements of cash flows for the periods presented. In future filings, please enhance your revenue accounting policy to specify for which revenue types you receive and recognize non-cash consideration.

The Company advises the Staff that in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, the Company will specify for which revenue types the Company receives and recognizes non-cash consideration by including additional disclosure in the Note titled “Summary of Significant Accounting Policies–Crypto assets held” in the Company’s Notes to its condensed consolidated financial statements as the Company has determined that this disclosure is necessary in connection with the Company’s adoption of ASU 2023-08 to explain the Company’s accounting policy for crypto assets

Rest of the answer

held for operations. Furthermore, the Company advises the Staff that the Company will also enhance the disclosure of its revenue recognition policy included in the Note titled “Summary of Significant Accounting Policies–Revenue recognition” in the Company’s Notes to its consolidated financial statements included in the 2024 Form 10-K to specify for which revenue types the Company receives and recognizes non-cash consideration.

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We note your response to prior comment 27 and your stablecoin revenue recognition policy on page 139. Please address the following with respect to your relationship with the issuer of USDC under your original distribution agreement and/or your August 2023 Collaboration Agreement: • Tell us what you determined your performance obligation was under your original distribution agreement and collaboration agreement and

Rest of the question

how that performance obligation is satisfied. Please revise your accounting policy in future filings to include this information. Refer to ASC Topic 606-10-50-12. • Please provide us with a summary of the rights and obligations between you and the issuer of USDC with respect to the original distribution agreement and the collaboration agreement. • Tell us the term of the collaboration agreement and clarify for us whether the agreement can be terminated or modified at any time by either party with or without penalty. • Clarify for us how income is calculated under the original distribution agreement and under the collaboration agreement and tell us how you considered the need to disclose more detail with respect to the calculation. Refer to ASC Topic 606-10-50- 20 through 606-10-50-21. • Tell us and enhance future filings to define “total market capitalization” which you identify as a factor in the amount of revenue you earn. • Explain to us how revenue received from your arrangement with the issuer of USDC was impacted by the termination of the original distribution agreement and entry into a new collaboration agreement. In your response, tell us how you considered the need to provide MD&A disclosure about the impact of the new agreement in order for investors to understand expected trends in your stablecoin revenue.

The Company advises the Staff that in 2018, the

Company and Circle Internet Financial, LLC (“Circle”) established the Centre Consortium. The Centre Consortium was a joint venture owned 50% by the Company and 50% by Circle. In addition to the joint venture, the Company and

Circle were party to an arrangement under which the Company earned income generated from USDC reserves based on the amount of USDC distributed by each respective party and the amount of USDC held on each respective party’s platform in relation to the total amount of USDC in circulation.

Rest of the answer

The Company did not have any obligation to distribute USDC as part of this arrangement.

In

August 2023, the Company entered into an updated arrangement with Circle (the “Circle Agreement”). Pursuant to the Circle Agreement, the Company earns a pro rata portion of income earned on USDC reserves based on the amount of USDC held on each respective party’s platform, and from the distribution and usage of USDC after certain expenses. Income derived by the Company from this arrangement is dependent on various factors, including the balance of USDC on the

Company’s platform, the total market capitalization of USDC, and the prevailing interest rate environment.

The Circle Agreement has an initial three-year term that is automatically renewable under certain conditions. If the conditions are satisfied, the Circle Agreement cannot be terminated. However, there are certain circumstances under which the parties may initiate a restructuring of the agreement. If an amendment or restructuring is not possible or Circle does not make payments to the Company following such restructuring period, the Company can require the assignment of certain trademarks by Circle to the

Company, which would also impact the arrangement between the parties and Circle’s ability to issue other U.S. dollar-denominated stablecoins.

The Company’s reference to “total market capitalization of USDC” refers to the total amount of USDC in circulation. The Company will enhance its future filings, beginning with the Q1 2024 Form 10-Q, to define total market capitalization of USDC.

While the updated arrangement simplifies the calculation of revenue to be earned, the main drivers and ultimate economics are driven by returns on the underlying USDC reserves, the amount of USDC held on each respective party’s platform and the amount of USDC in circulation (as described above). Given this, the Company believes that its current disclosures are adequate to allow investors to understand expected trends in the Company’s stablecoin revenue.

The

Company does not account for the original distribution agreement or the updated collaboration arrangement with Circle under ASC 606 – Revenue from Contracts with Customers (“ASC 606”) and therefore does not believe that revisions are required to the Company’s accounting policy. ASC 606-10-15-3 indicates that an entity shall apply the guidance in ASC 606 to a contract only if the counterparty to the contract is a customer. A customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration.

Based on the terms of the Circle Agreement, Circle does not meet the definition of a customer as outlined in ASC 606 as Circle does not obtain goods or services that are an output of the Company’s ordinary activities for consideration.

The Circle Agreement serves as a revenue sharing arrangement. While the sale of stablecoins could be viewed as an ordinary activity of either party to the agreement, these activities are performed directly with third-party customers and are not subject to this agreement.

As USDC is a financial asset, reselling USDC by the Company to the Company’s customers falls within the scope of ASC 860 –

Transfers and Servicing of Financial Assets (“ASC 860”). As ASC 860 does not provide specific guidance on the principal versus agent determination, the Company looked to both ASC 606 and ASC 470 –

Debt by analogy.

The Company believed ASC 606 could provide an appropriate framework to analogize in the context of whether the

Company is the principal to the Company’s customers or serving as an intermediary between Circle and the Company’s customers, as those arrangements are under ASC 606.

ASC 606-10-55-39 considerations were as follows:

Primary responsibility for fulfillment of USDC

The Company’s customers can purchase USDC directly from the Company’s platform once they have agreed to the Company’s user terms. Per the Company’s user agreement, the Company is primarily responsible for the delivery of USDC to the Company’s customers if purchased from the Company’s platform.

Inventory risk

The Company acquires USDC from Circle using its own funds before reselling it to third-party customers and holds material USDC

“inventory” to facilitate customer orders. The Company does not have any transactions or any bids with third-party customers lined up prior to acquiring USDC from Circle. If the Company is unable to sell USDC to third-party customers, it would hold USDC in inventory.

Discretion in Establishing Price

The Company has full discretion in the fees the Company charges to its customers for USDC transactions.

The Company then looked to ASC 470 by analogy as Circle recognizes funds received from third parties upon issuance of USDC as deposits held on the USDC holder’s behalf which is considered a financial liability. The Company believes that it could be viewed as an intermediary between Circle and the Company’s customers and looked to guidance in ASC 470-50 when determining whether as an intermediary the Company should be considered a principal or an agent in this relationship.

ASC 470-50-55-7 considerations were as follows:

Intermediary’s exposure to risk of loss

The Company acquires USDC from Circle using its own funds before reselling it to third-party customers. The Company does not have any transactions or any bids with third-party customers lined up prior to acquiring USDC from Circle and does not obtain any reimbursement from Circle if it cannot sell USDC to third-party customers.

Intermediary’s level of commitment

The Company does not operate under best-efforts agreement and is fully committed to acquiring USDC from Circle irrespective of whether it is able to arrange offsetting transactions to resell USDC to third-party customers. If the Company is unable to sell USDC to third-party customers, it would continue to hold USDC inventory.

Debtor’s power to direct the intermediary’s transactions

Circle has no control over resell transactions that the Company executes with the Company’s customers. The Company makes its own independent decision regarding whether to execute purchase or sale transactions with third-party customers and it is exposed to overall market and credit risks associated with USDC while it holds it.

Intermediary’s compensation

The Company does not receive a predetermined fee from Circle as compensation for reselling activities or any reimbursement for losses incurred by the Company related to purchases and sales of USDC. The Company receives a share of income generated from USDC reserves held by Circle on behalf of USDC holders. However, this share is not linked to purchases and sales of USDC and instead is based on the amount of USDC held on each respective party’s platform, and from the distribution and usage of USDC after certain expenses. Further, the Company is exposed to overall market and credit risks associated with USDC while it holds it.

Based on the factors above under ASC 606-10-55 and under ASC 470-50, the Company concluded that it is considered a principal in purchasing USDC from Circle. Therefore, the Company would treat its purchases and sales of USDC with the Company’s customers as transactions among holders of USDC and would be considered the principal in those subsequent sales and repurchases of USDC with third-party customers. Thus, the Company concluded it does not act as an agent in providing USDC reselling services to Circle under this agreement. Therefore, the guidance in ASC 606 is not applicable as Circle is not considered to be a customer.

Given the Company’s conclusions above that the Circle Agreement is not a financial instrument, does not qualify for derivative accounting treatment as a collaborative arrangement or as a contract with a customer, or pursuant to any other accounting policy under GAAP, the Company treats the arrangement as an executory contract. In other words, the agreement is accounted for on an accrual basis, with respect to each monthly calculation period. The Company analogizes to guidance in ASC 450-30 on gain contingencies which states that a contingency that might result in a gain should not be reflected in financial statements because to do so might be to recognize revenue before its realizable. Therefore, the Company does not recognize the amount due under the arrangement until the income on reserves is generated for the calculation period and becomes realizable.

The Company further advises the Staff that the income calculated under the original distribution agreement follows the same accounting guidance cited above. Under the original distribution agreement Circle does not meet the definition of a customer as outlined in ASC 606 as neither Circle nor the Company obtain goods or services that are an output of the other entity’s ordinary activities for consideration. The same analysis was applied for the updated collaboration arrangement and the Company reached the same conclusions.

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We note from your accounting policy disclosure on page 137 that your crypto asset loan receivables are initially and subsequently measured at the fair value of the underlying crypto asset lent and adjusted for expected credit losses. We also note from your disclosure on page 118 that you have embedded derivatives associated with your crypto asset loans receivable.

Rest of the question

Please address the following, referencing where appropriate, the authoritative guidance you rely upon to support your position: • Tell us the basic terms of your crypto asset lending transactions, including the following:o Whether the length of the loans is for a defined period of time or is open-ended. o Whether the borrower can pre-pay the loan or you can call the loan before maturity. o Whether the borrower has any restrictions on what they can do with the crypto asset lent. o Whether the borrower is obligated to return the same type of crypto asset as lent. o Whether there are any provisions where the borrower can settle the loan in cash or in a different crypto asset. o Whether the borrower must pay the interest component in the same crypto asset as lent. o Whether the interest component is indexed to the crypto asset lent. • Tell us how you account for your crypto asset loans receivable. In your response, explain:o Whether you derecognize the crypto asset lent. o Whether you record a gain or loss upon issuance of the loan when marking it to fair value and, if so, where you classify that gain or loss. o Why you record a derivative including whether the loan is a derivative in its entirety or if it contains an embedded derivative. • Tell us how you account for collateral received on your crypto asset loans receivable, including crypto held in a Coinbase omnibus wallet that can be used for collateral. Clarify when you record the collateral on your balance sheet and explain whether your accounting for collateral differs from your accounting for crypto asset borrowing transactions and explain why.

The Company advises the Staff that the terms of the Company’s crypto asset lending transactions may vary from loan to loan as they are negotiated with individual institutional counterparties. The typical loan terms are as follows:

The length of loans are typically open-ended, though some may have a fixed term of less than one year.

Rest of the answer

As of

December 31, 2023, all outstanding crypto asset loans receivable had terms that were open-ended.

Under the standard terms of the Company’s master lending agreement, borrowers have the option to terminate a loan at any time by giving notice to the Company and returning the loaned crypto assets. The Company may also terminate a loan at any time by providing written notice to the borrower at least one business day prior to the requested termination date.

There are no restrictions on what borrowers may do with the crypto assets lent to them by the Company.

The borrower is obligated to return the same type of crypto asset lent; there are no provisions where the borrower can settle the loan in cash or in a crypto asset different from that which was lent, except in the case of a Disruption Event (as defined in the relevant agreement).

Interest on the loans may be paid by the borrower in cash or in the same crypto asset lent, depending on the terms of the particular loan.

When interest is payable in cash, it is calculated in crypto units and converted to a cash amount using the end of month spot price for the crypto asset lent.

The Company advises the Staff that because GAAP does not provide explicit guidance on the lending of crypto assets, the Company accounts for crypto asset loans receivable based on comments made by the Commission at the AICPA & CIMA Conference on Current SEC and PCAOB Developments (Conference) in

Washington, D.C. in December 2022 (the “AICPA & CIMA Conference”) and the AICPA Practice Aid, “Accounting for and auditing of Digital Assets” (the “AICPA Practice Aid”).

When crypto assets are lent by the Company, those crypto assets are derecognized from the Company’s consolidated balance sheets and an associated crypto loan receivable is recognized, which is initially measured at the fair value of the crypto asset lent. At the time of derecognition, any difference between the fair value of the crypto assets and their carrying amount is recognized as a gain or loss on derecognition. Prior to the adoption of ASU 2023-08, the derecognition gain or loss was presented separately from revenue in the Company’s consolidated statements of operations. Under the prior guidance, when the crypto assets lent originated from crypto assets held for operations or investment, the gain or loss was presented within Crypto asset impairment, net. When crypto assets borrowed were subsequently lent out, the gain or loss was presented within Other operating expense (income), net. On a go forward basis under ASU 2023-08, effective January 1, 2024, the Company presents the gain or loss within Gains on crypto assets held for operations, net or Gains on crypto assets held for investment, net depending on the classification of the loaned assets. When crypto assets borrowed are subsequently lent out, the gain or loss is presented within Transaction expense.

While a crypto asset loan receivable is outstanding, it is measured at the fair value of the crypto assets lent, with changes in fair value recognized in profit or loss. Prior to the adoption of ASU 2023-08, the Company recorded changes in the fair value of crypto assets lent within Other operating expense, net. On a go forward basis under ASU 2023-08, effective January 1, 2024, the Company records the changes in fair value of crypto assets lent within Transaction expense. Crypto asset loan receivables are assessed for expected credit losses, and the carrying value is reduced by any allowance for credit losses recognized.

In determining whether an allowance for expected credit loss is required, the Company applies the collateral maintenance practical expedient as collateral is continuously monitored and collateral is adjusted based on the fair value of the crypto assets lent and changes in fair value of the assets pledged as collateral. The Company refers the Staff to the Company’s response to comment 20 for additional details.

Prior to the AICPA & CIMA Conference, the Company performed an assessment to determine the accounting for crypto asset loans and receivables under ASC 815 – Derivatives and Hedging (“ASC 815”) and concluded that they do not represent derivatives in their entirety as the initial net investment criteria in ASC 815-10-15-8(b) is not met. The Company then concluded that crypto asset loans and receivables represent a host contract and embedded derivative. The loan or receivable denominated in the Company’s functional currency for a fixed quantity of crypto assets is the host contract, and the embedded derivative is a forward contract that swaps the Company’s functional currency for a fixed quantity of crypto assets.

Subsequent to the release of the AICPA Practice Aid, which clarified the Commission’s view that crypto asset loans are receivables measured at fair value, the Company updated its accounting treatment and disclosures of such loans for the year ended December 31, 2023. The Company considered whether to treat the change as an adoption of a new accounting principle under ASC

250 and retrospectively update the disclosures for the comparative periods presented, but concluded that the updates were not material and elected to apply the new accounting principle on a prospective basis only. Within the Company’s derivatives disclosures, it retained all references to loans receivable as previously presented because the comparative period was not retrospectively updated. As of and for the year ended December 31, 2022, the notional amount of crypto asset loan receivables presented as derivative instruments not designated as hedging instruments was $[*], embedded derivative assets and liabilities were $[*] and $[*], respectively, and losses on these embedded derivative instruments were $[*].

The Company advises the Staff that it accounts for collateral received on crypto asset loans receivable under the provisions of ASC 860-30, which provides guidance on the recognition of cash and non-cash collateral. Due to the application of the accounting guidance for transfers of financial assets within ASC 860, there may be instances in which the Company has recognized a crypto asset loan receivable on its consolidated balance sheets, but has concluded that the associated collateral does not meet the recognition criteria.

In accordance with ASC 860-30-25-3, when cash collateral is received into a Coinbase controlled collateral wallet, the Company recognizes the cash and a corresponding obligation to return that cash, regardless of whether the Company has the rights to sell or rehypothecate the collateral pledged. The Company does not use this cash as collateral for any loan, margin, rehypothecation, or other similar activities without the customers consent to which the Company or its affiliates are a party.

When non-cash collateral, i.e., crypto assets or USDC, is received, the Company applies the non-cash collateral provisions under ASC 860-30-25-5 to determine whether the collateral is recognized in its consolidated balance sheets. Although crypto assets are non-financial assets, ASC 860 is applied by analogy. In accordance with this guidance, non-cash collateral is only recorded if the Company has the rights to sell or rehypothecate the collateral and a sale of the collateral occurs, or if the borrower defaults under the terms of the secured contract and is no longer entitled to redeem the pledged asset. The Company does not use customer crypto assets pledged as collateral as Company collateral for any loan, margin, rehypothecation, or other similar activities without the customers’ consent to which the Company or its affiliates are a party.

Borrowers may enter into a lending agreement with a collateral pledge designating their Coinbase account as collateral. Under the terms of these agreements, borrowers agree to keep assets in their Coinbase account equal to or greater than the fair value of the required collateral on their USD, USDC or crypto asset loans, as applicable. These account balances are held in Coinbase omnibus wallets on the Company’s platform and fiat, USDC, and crypto asset balances are ledgered to the borrowers’ accounts. As long as the designated account maintains sufficient value to collateralize outstanding loans under the terms of the lending and pledge agreement, there are no restrictions or holds placed on the assets in the borrower’s Coinbase account. The fair value of such accounts are systematically monitored on a 24/7 basis, and if the value declines to the pre-established threshold stipulated in the pledge agreement, a hold is placed on the account and the borrower is required to deposit additional collateral. The Company does not record the collateral held in Coinbase accounts subject to pledge agreements (including cash collateral), as the borrower maintains control over the assets and therefore they have not been transferred to the Company. As these assets are held unencumbered in customer accounts, they are included in the Company’s safeguarding assets and liabilities within the consolidated balance sheets. In the event that a hold is placed on the assets, the Company applies the cash collateral provisions under ASC 860-30-25-3 or the non-cash collateral provisions under ASC 860-30-25-5 to determine whether the collateral is recognized in the Company’s consolidated balance sheets as described above.

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Please address the following with respect to USDC loans: • Please provide us with, and consider expanding your disclosure in future filings to include, a detailed analysis explaining how you arrived at the conclusion that loaned USDC should continue to be recognized on your balance sheet with reference to relevant accounting literature.

Rest of the question

• Please tell us, and consider expanding your disclosure in future filings to include, your collateral policies with respect to loaned USDC. In your response, tell us the amount of collateral pledged by borrowers with respect to USDC loans, the form of that collateral (e.g., fiat currency or other crypto assets) and whether the collateral meets the recognition criteria to be included in your consolidated balance sheets.

The Company advises the Staff that USDC is considered a non-cash financial asset. ASC

860-10-15-3 states that “the Transfers and Servicing Topic applies to the issues of accounting for transfers and servicing of financial assets.” USDC held by the Company is accounted for as a financial asset because it contains a contractual right to receive cash from the issuer of USDC.

Rest of the answer

Given USDC is a financial asset, loans of USDC represent transfers of financial assets that are subject to analysis under ASC 860.

The Company assessed whether the scope exceptions in ASC 860-10-15-4 apply to USDC loans and determined they did not apply due to the following:

USDC is not a non-financial asset - it is a financial instrument

USDC is a recognized financial asset

The transfer does not represent a custody arrangement

The transfer is not a contribution subject to ASC 958

The transfer is not of in substance financial assets subject to ASC 610-20

The transfer is not an investment by, or distribution to, owners of the transferor/transferee

These are not employee benefits subject to ASC 712

The transfer does not represent a leveraged lease or money-over-money/wrapped lease transactions involving recourse debt, that is subject to ASC 842

ASC 860 provides that if the transferor of financial assets has any

“continuing involvement” in the financial assets transferred, then the three conditions in ASC 860-10-40-5 must be satisfied in order to achieve sale accounting and derecognize the transferred financial assets. The effective control condition in ASC 860-10-40-5(c) is not met for the USDC loans receivable where there is either a fixed maturity or the loan is open-ended. This is because, in either case, the borrower has an obligation to return the same financial assets (USDC) back to the Company, which would release the collateral pledged for the loan. This is akin to a repurchase obligation or forward contract, which constitutes a form of continuing involvement with the financial assets transferred. Because the Company maintains effective control over the transferred USDC, the USDC loans continue to be recognized on the Company’s consolidated balance sheets.

The following table details the amount of collateral pledged by borrowers with respect to USDC loan receivables as of December 31, 2023.

None of the pledged collateral met the recognition criteria described in the Company’s response to comment 18 and therefore were not included in the Company’s consolidated balance sheets. The collateral pledged for USDC loans that did not meet the recognition criteria is a subset of the $713 million of collateral pledged for all loan types that did not meet the recognition criteria discussed in the Company’s response to comment 20.

[*]

The Company further advises the Staff that the Company will expand its disclosure in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, to explain how the Company arrived at the conclusion that loaned USDC should continue to be recognized on the Company’s consolidated balance sheets and reference the relevant accounting literature and to include the Company’s collateral policies with respect to loaned USDC.

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We note your disclosure on page 133 that loans receivable are collateralized with crypto assets held by borrowers in their crypto asset wallets on your platform. Please provide us the following: • Tell us whether in all cases you request the additional collateral from the borrower if the fair value of the collateral drops below the predefined threshold.

Rest of the question

If not, please quantify how frequently you do not actually enforce your contractual rights under your loan receivable agreements and clarify the factors that you evaluate in deciding not to require the additional collateral to be posted. • Given the nature of the collateral for these loans receivable, tell us how you concluded that the collateral maintenance practical expedient in ASC 326-20-35-6 applied for these loan receivables. • We note your disclosure on page 162 that you had $712.6 million and $136 million of collateral assets pledged by borrowers as of December 31, 2023 and 2022 respectively where the Company did not have a right to use the collateral or the collateral did not meet the recognition criteria. Please explain to us why the collateral did not meet the recognition criteria. Cite any relevant accounting literature in your response. Additionally, in your response, please provide a schedule detailing the amount of unrecognized collateral assets denominated in USDC, fiat currency and crypto assets (including the type of crypto asset). Tell us what consideration you have given to including this information in your filing.

The Company advises the Staff that it monitors the fair value of collateral pledged by borrowers systematically on a 24/7 basis. In all cases, if the value of the borrower’s eligible collateral falls below the required collateral, borrowers must deposit additional collateral. The Company adheres to strict internal risk management and liquidation protocols for counterparty defaults, including restricting trading and withdrawals and liquidating assets in borrowers’ accounts as contractually permitted.

The terms of all loans require the borrower to post collateral, and the required collateral

Rest of the answer

amount is continually adjusted as a result of changes in the fair value of the collateral and the loaned crypto asset to ensure that loans remain fully collateralized. A method consistent with the collateral maintenance practical expedient in ASC 326-20-35-6 is applied in estimating expected credit losses. In applying this method, expected credit losses are estimated based on the difference between the fair value of the collateral and the fair value of the crypto asset lent. If the fair value of the collateral exceeds the fair value of the crypto asset lent, then no expected credit losses are recognized. However, if the fair value of the crypto asset lent exceeds the fair value of the collateral, then the expected credit loss will be limited to the difference between those fair values. As of December 31, 2023, the fair value of all of the Company’s loans receivable were greater than 100% collateralized, so no expected credit loss was recognized.

The Company concluded that application of the practical expedient is appropriate because in the event of borrower default, under the terms of the Company’s lending and collateral agreements, repayment is expected to be provided substantially through the sale of the collateral. The crypto assets that the Company accepts as collateral are actively traded, and there are minimal costs associated with selling the collateral.

The Company applies the guidance in ASC 860 to determine whether non-cash collateral pledged by borrowers meets the recognition criteria. The Company refers the Staff to the Company’s response to comment 18 for further details. The Company discloses as of the end of each reporting period, the total amount of collateral pledged by borrowers that did not meet the recognition criteria and the types of collateral pledged (fiat, USDC, and crypto assets). The Company respectfully advises the Staff that the Company believes this disclosure is sufficient to satisfy the requirements of ASC 860-30-50-1A because the Company has disclosed the amount and classification of the collateral.

The following table details the amount of unrecognized collateral assets as of December 31, 2023:

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We note your disclosure on page 139 that crypto asset borrowings are accounted for as hybrid instruments, with a liability host contract that contains an embedded derivative. Please address the following referencing, where appropriate, the authoritative guidance you rely upon to support your position: • Tell us the basic terms of your crypto asset borrowing transactions.

Rest of the question

In addition to the terms disclosed in the second paragraph on page 137, tell us the following:o Whether you can pre-pay the loan or the lender can call the loan before o If you have any restrictions on your use of the cryptocurrency borrowed. o If there are any provisions that allow you to settle the loan in cash or in a different cryptocurrency. If so, tell us those provisions. • Tell us how you account for your crypto asset borrowings. In your response, explain how you identify an embedded derivative. Cite any relevant accounting literature in your response. • Tell us how you account for collateral posted on your crypto asset borrowings. In your response:o Clarify when you derecognize the collateral posted from your balance sheet. o Explain whether your accounting for collateral differs from your accounting for crypto asset lending transactions and, if so, explain why.

The Company advises the Staff that the terms of the

Company’s crypto asset borrowing transactions may vary from loan to loan as they are negotiated with individual counterparties. In addition to the terms disclosed in Note 2. Summary of Significant Accounting Policies of the Notes to the

Company’s consolidated financial statements included in the 2023 Form 10-K, typical loan terms are as follows:

The Company has the option to terminate a loan at any time by giving notice to the lender and returning the borrowed crypto assets.

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The lender may also terminate a loan at any time by providing written notice at least one business day prior to the requested termination date.

There are no restrictions on what the Company may do with the crypto assets lent to it.

The Company is obligated to return the same type of crypto asset lent; there are no provisions where the Company can settle the loan in cash or in a crypto asset different from that which was lent, except in the case of a Disruption Event (as defined in the relevant agreement).

The Company advises the Staff that crypto asset borrowings are accounted for as hybrid instruments, with a liability host contract that contains an embedded derivative based on the changes in the fair value of the underlying crypto asset. The host contract is not accounted for as a debt instrument because it is not a financial liability, is carried at the initial fair value of the assets acquired and is reported in crypto asset borrowings on the Company’s consolidated balance sheets. The embedded derivative is accounted for at fair value, with changes in fair value recognized in other operating expense, net in the

Company’s consolidated statements of operations. Subsequent to the adoption of ASU 2023-08, changes in the fair value of the embedded derivative are recognized in transaction expense in the Company’s consolidated statements of operations.

The embedded derivatives are included in crypto asset borrowings on the Company’s consolidated balance sheets.

To determine whether the crypto asset borrowings met the definition of a derivative, the

Company applied the guidance in ASC 815. To be a derivative pursuant to ASC 815, an instrument must be a financial instrument or other contract (or embedded feature) with all of the following characteristics:

One or more underlyings

One or more notional amounts

No/minimal initial net investment

Net settlement

Crypto asset borrowings have an underlying (the crypto asset’s market value), a notional amount, and are net settable (crypto assets are assets readily convertible to cash through use of established exchanges). However, the borrowings do not meet the “No/minimal initial net investment” criteria, as the terms of the borrowing agreements require the lender to transfer crypto assets upfront in exchange for a promise from the borrower to repay crypto assets plus interest of the borrowed crypto asset upon the maturity date or termination of the loan. Therefore, the crypto asset borrowings are not considered derivative instruments in their entirety.

The Company determined that the crypto asset borrowings contain embedded derivatives by analogizing to the example provided in ASC 815-10-55-76, in which an obligation to deliver shares in the future is viewed as a hybrid instrument with a debt host and embedded forward derivative feature. The Company identified the host contract as a dollar-denominated debt obligation based on the fair value of the underlying crypto asset at loan inception, with a fixed interest rate following the principles in ASC 815-15-25-24. The crypto asset indexed element of the obligation is viewed as an embedded feature with an initial fair value of zero pursuant to ASC 815-15-30-4.

The Company determined that the embedded features require bifurcation pursuant to ASC 815-15-25-1 as the embedded features are not clearly and closely related to the host instrument and would meet the characteristics of a derivative if freestanding. Additionally, the hybrid instrument is not remeasured at fair value under otherwise applicable GAAP. The Company’s accounting is consistent with the accounting prescribed by the AICPA Practice Aid, Q&A 26.

The Company advises the Staff that collateral pledged on crypto asset borrowings are evaluated under the guidance in ASC 860. Collateral may be pledged by the Company in the form of cash, USDC or crypto assets. Although crypto assets are non-financial assets the guidance in ASC 860 has been applied by analogy. Pursuant to ASC 860-30-25-5, collateral will only be reclassified within the

Company’s consolidated balance sheets if the lender has the right by contract or custom to sell or repledge the collateral. Collateral pledged on crypto asset borrowings are not derecognized from the consolidated balance sheets. There may be instances in which the accounting for the collateral associated with a borrowing differs from the crypto asset borrowing transaction itself. Specifically, all crypto asset borrowings are recognized on the Company’s consolidated balance sheets whereas the recognition of the associated collateral pledged by the Company is dependent on the evaluation under ASC 860. The Company evaluates collateral pledged on borrowings and collateral received from borrowers for crypto asset lending transactions under ASC 860 and there are no differences in how collateral is accounted for under this guidance.

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We note your response to prior comments 7, 8, 23 and 37. Please address the following with respect to your staking activities: • It appears from your disclosure on page 9 that approximately $16.8 billion of customer assets held by you have been staked through your platform (approximately $9.4 billion and $7.4 billion staked for individual and institutional customers respectively).

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Please provide us a schedule detailing the amount of assets staked for each of the seven staking assets supported by your platform. Please provide this information disaggregated by type of customer (i.e. individual or institutional). • Please provide us with the following information related to your blockchain rewards for each period presented in your financial statements. To the extent you are able, please provide the information in the form of a schedule that reconciles to the total blockchain rewards recognized for each period:o Tell us the amount of blockchain rewards revenue recognized for staking your own assets held for investment, staking assets on behalf of customers on your own nodes and staking assets on behalf of customers on nodes operated by third parties. o Tell us the amount of blockchain rewards revenue recognized by type of staking asset supported by your platform. • Please provide us with a detailed description of how your arrangements with individual and institutional customers are structured including a discussion of how you determine the portion of the blockchain rewards that will be retained by the company versus remitted to the customer. • It appears from your disclosure in footnote 10 to your financial statements for the year ended December 31, 2023, that of the $16.8 billion of customer assets staked through your platform at December 31, 2023, approximately $10 billion was Ethereum. Please confirm that our understanding is correct and address the following (note we may have similar comments related to other staking assets after reviewing your response):o Provide us with a detailed description of the staking process. Your response should include a discussion of your role in the staking process and how and when rewards are transferred to you. o Provide us with a step-by-step analysis of how you applied the guidance in ASC Topic 606 with respect to your revenue recognition policy. o Tell us how you determined revenue related to assets staked by customers through your platform should be recognized on a gross basis. In your response, clarify whether revenue related to assets staked through third party nodes is also recognized on a gross basis. o Tell us whether there are any restrictions on the availability of staked assets either placed on you and your customers by the blockchain network or placed on your customers by you. Tell us how any restrictions impacted your conclusions as to whether staked assets should be recognized on your balance sheet.

to the Staff’s comment, below is a table showing staked balances by consumer and institutional customers, respectively, as of

December 31, 2023:

In response to the Staff’s comment, below is a table showing blockchain rewards revenue by staking asset supported by the Company’s platform for the years ended December 31, 2023, 2022 and 2021, respectively:

In response to the Staff’s comment, below is a table showing blockchain rewards revenue recognized for staking assets on behalf of customers on Coinbase nodes and staking assets on behalf of customers on nodes operated by third parties for

Rest of the answer

the years ended December 31, 2023, 2022 and 2021, respectively:

Staff that no rewards for staking the Company’s own assets held for investment were recognized in blockchain rewards for the periods presented.

The Company advises the Staff that its understanding is correct: There were $16.8 billion of customer assets staked through the Company’s platform as of December 31, 2023, and approximately $10 billion of the $16.8 billion was staked on Ethereum.

The Company further advises the Staff that the Company makes available to its consumer customers staking services by which it facilitates their participation as validators for certain proof-of-stake networks. Proof-of-stake blockchain networks depend for their functionality on crypto asset holders’ validation through staking, which involves running public open-source software on a computer to validate transactions. Holders who stake their assets receive compensation, paid out by applicable blockchain protocols, in the form of the network’s digital asset. The Company runs software and provides certain administrative services to allow customers to stake Ether and other select digital assets that operate on a proof-of-stake network. As a fee for this service, the Company receives a fixed percentage of participating customers’ staking rewards.

For the Company’s consumer customers, the rewards rates, expressed as an annual percentage yield (APY), vary by asset. The Company takes the rates set by the underlying protocol and displays them on its website, net of the Company’s fees. The Company provides additional details on its staking offering on its website, including with respect to the risks, eligibility, and process for staking and unstaking crypto assets.

When a protocol distributes rewards, the Company passes along the rewards to its consumer staking users for each payout period in proportion to the amount of the users’ staked tokens, minus the Company’s disclosed commission fee. Rewards are credited to the user’s account on the Company’s ledger after the rewards have been earned onchain. These rewards are subject to the same withdrawal procedures as staked principal, meaning that even though rewards have been credited, users need to wait the protocol’s unstaking period to withdraw them. That is because there are some blockchains that may “restake” staking rewards automatically, so that a staking node’s balance will compound over time. Other protocols require a separate blockchain operation to restake rewards. To provide a uniform customer experience in eligible jurisdictions, the Company has contractually committed to restake any rewards that a network chooses to distribute in unstaked form. There is no discretion or particular skill involved in restaking rewards.

The Company credits staking rewards at different cadences, depending on the underlying blockchain protocol. For example, Tezos rewards are paid every three days, Cardano rewards are paid every five days, and rewards for ATOM, from the Cosmos Hub blockchain, are paid every seven days. As a result of server processing time, the Company’s users receive their rewards at a slight delay after they have been earned onchain.

For the Company’s institutional customers, the Company’s staking process is a service that varies by customer, and the Company does not currently stake on behalf of institutional clients. Rather, institutional clients stake directly to validators. Some institutional customers stake directly to public validator nodes where the Company operates and maintains the validator nodes by procuring the necessary infrastructure (such as cloud computing services) and ensuring that the code required to operate the node is kept up to date. Alternatively, the Company provides infrastructure services to (i) enable institutional customers to operate their own validators, and (ii) connect institutional custody customers to validators. These validators can be third-party validators or the Company’s public validators. Institutional customers receive rewards directly from the protocol. The fees charged by the Company to institutional customers depend on the customer agreement and the selected service.

Below is a step-by-step analysis of how the Company applied ASC 606 with respect to its revenue recognition policy:

Step 1: Identify the contract with the customer for the purposes of ASC 606

Consumer Staking

These staking arrangements require the Company to establish and operate validators that perform the block creation and validation on the blockchain network. Parties that stake crypto assets through the Company’s staking services are not required to provide any goods or services to the blockchain network. As such, the substance of the arrangement is the Company is providing staking services connecting stakers to the blockchain network. Parties that stake crypto assets through the Company’s staking services are considered suppliers, who are instructing the Company to use their crypto assets to perform staking. The blockchain network is thus the customer in the arrangement.

There is no written legal contract that exists between the blockchain network and any party with regards to staking. ASC 606 does not only include written legal agreements within the definition of a contract. ASC 606-10-25-2 states that “Contracts can be written, oral, or implied by an entity’s customary business practices,” while paragraph BC32 in the Basis for

Conclusions of ASU 2014-09 states “Whether the agreed-upon terms are written, oral, or evidenced otherwise (for example, by electronic assent), a contract exists if the agreement creates rights and obligations that are enforceable against the parties.” Validators of the network are expected to be aware of the protocol underlying the network. The rules of the network do not create legal rights and obligations, and no single participant of the network is able to override the protocol rules. The operation of the network protocol is thus viewed as analogous to a legal agreement, and a contract for the purposes of ASC 606 would therefore be inferred between the Company and the blockchain network.

Institutional Customer Staking

Institutional clients enter into an implicit agreement with the network whereby the institutional client has staked assets to the blockchain;

they are considered “delegators.” The blockchain provides the delegators a list of various service providers, of which the Company’s validator node may be one, which they can use. The control of the service (delegated tokens) and risk

(including slashing risk) remains with the institutional client. The Company’s or third party’s validator node acts as a conduit for which it earns a fee directly from the protocol. Delegators receive rewards directly from the protocol. A contract for the purposes of ASC 606 would therefore exist between the institutional client and the blockchain network and between the Company and the institutional client for providing infrastructure services.

Step 2: Identify the performance obligations

Consumer Staking - Performance Obligation

When the Company operates a validator node and performs staking, there are a number of different promised services within the meaning of ASC

606 that the Company could be required to perform. These include (1) block creation, (2) block attestation, (3) reporting malicious activity of other validators, and (4) confirming the state of the blockchain at any point in time. Each of these promised services are capable of being distinct, as the blockchain network could benefit from each one independently of any others.

When the Company operates a validator node, it does not have the option to perform only some of the promised services. Rather, it is required to perform any of the services when requested by the network. These promises represent a single performance obligation because the promised services are not distinct within the context of the contract. The network engages validators to maintain the overall security and integrity of the network, and incentivizes validators to do this through rewards and fee sharing. All the promised services contribute to this single, combined performance obligation of maintaining the security and integrity of the network. For purposes of ASC 606, consumers that delegate their crypto assets do not perform any of the staking services, other than to opt into staking. As such, the Company is the principal with respect to the performance obligation.

Institutional Staking - Performance Obligation

Institutional clients (“delegators”) and the network have an agreement whereby the delegator stakes their assets to provide validation support on the network. The Company acts as a conduit to connect delegators and the network, providing those delegators with a platform that enables them to participate in staking on the network. Delegators in the network are not the parties that actually undertake block creation and validation. However, delegation contributes to the network integrity by signaling to the network who the reliable validators are. On certain protocols, delegators are subject to slashing when the validator does not perform in accordance with the rules of the protocol. As such, delegators are disincentivized to delegate to unreliable validator nodes. This in turn results in them delegating to more reliable validator nodes, which results in the most reliable validators getting to perform staking services. In exchange for delegating, the delegators earn rewards, after paying a commission to the validator.

For purposes of ASC 606, there are three parties involved—the network, the delegator, and the validator (which could be the Company):

The Company is not primarily responsible for providing the services of delegators to the network. Delegators can freely choose which validator they want to delegate to. They can also choose when they want to stop delegating. The Company cannot force any person to delegate to its validator, nor can it reject those delegators from delegating to its validator.

The Company does not bear any inventory risk, as the crypto assets delegated by delegators are controlled by the delegators. Those delegators control the addresses in which the crypto assets are held, so they would be exposed to price changes in the crypto assets. Furthermore, in the event that the Company’s validator gets slashed and the delegators’ crypto assets also get slashed, the Company is not liable to the delegators for such losses.

The Company only has latitude to set the amount of commission that it earns. The amount of commission is a percentage of the rewards attributable to delegators. The Company does not have any control over the amount of rewards that the network pays out to parties that delegate their crypto assets.

As such, the Company was determined not to be the principal with respect to providing the services of delegators to the network. The nature of the Company’s promise is therefore to provide a platform which delegators can use to participate in maintaining the integrity of the network. In exchange for providing these services, the

Company earns a commission, in the form of a percentage of the rewards earned by the delegators.

Step 3: Determine the transaction price receives rewards in exchange for providing the staking services to the blockchain network. The amount of rewards depends on the state of the blockchain network at the time that staking is performed. The amount of rewards may not be fixed at contract inception, so could therefore include variable consideration. In considering constraints on variable consideration, the Company notes that the amount of rewards earned is dependent on network and generally known within a short period of time, typically within 3 days after staking has been performed. The variability is therefore resolved within a short period of time, and therefore no estimation of constraint on variable consideration is required.

Institutional Staking

As at

Step 1 and 2, the Company acts as a conduit to connect the delegators and the network. In exchange, the Company earns a fee.

Further supporting this, is that the protocol automatically distributes the delegators’ share of rewards directly to the addresses of the delegators. Per ASC 606-10-32-2, “An entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).[…]” As such, for protocols where the protocol automatically distributes rewards to delegators, the terms of that contract would result in the amount that the Company expects to be entitled to being the amount of rewards after deducting the delegators’ share of rewards. Based on the code of the protocol, the validator knows that they would never receive or be entitled to the delegators’ share of rewards, and so the delegators’ share of rewards would be excluded from the transaction price.

The rewards are in the form of the native token of the blockchain network for which the Company performs staking, and would constitute non-cash consideration. Per ASC 606-10-32-21, the crypto assets received should be measured at their fair value at contract inception, or at each block completion.

However, for most proof-of-stake blockchain protocols, the time between contract inception and satisfaction of the performance obligation (i.e., recognition of revenue), is short (within hours or minutes). The Company has therefore elected to use the fair value of the crypto assets received at the time revenue is recognized rather than at contract inception. The difference in timing of measurement of the non-cash consideration is not expected to result in material differences, when that difference in timing is short. Applying the above to contracts with durations less than three days is not expected to result in a material difference, as the Company is expected to continuously perform staking over a period.

Step 4: Allocate the transaction price to the performance obligations

Staking arrangements typically only require the Company to perform staking services that maintain the integrity of the blockchain network, which would be one performance obligation. As such, all of the transaction price would be allocated to the single performance obligation identified.

Step 5: Determine when to recognize revenue

For staking services, the network receives and consumes the benefit from the staking services as they are provided by the Company, as the results of validating and attestation services will continuously maintain the integrity of the network. The transfer of control of the services is therefore over time. In general, blockchain networks are made up of blocks, which represent units of time. These blocks can be used to measure progress towards satisfaction of the performance obligation. As such, revenue is recognized at the point in time as each block is created.

Restrictions on the availability of staked assets are dependent on the network. The Company advises the Staff that the Company performs an analysis for each staking network to determine whether the Company controls the asset and therefore should record the staked assets on the Company’s consolidated balance sheets, considering the characteristics of an asset in CON 6, paragraph

26, guidance within Question 10 of the AICPA Practice Aid, Accounting for and auditing of digital assets and the Staff’s Accounting Bulletin No. 121.

Crypto assets staked through the Company’s platform by consumer and institutional customers whose assets are on the Company’s platform would be considered safeguarding liabilities and therefore recognized on the Company’s consolidated balance sheets, with a corresponding safeguarding asset if the criteria within the authoritative guidance are met.

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We note your response to prior comment 35. Please enhance your disclosures in future filings to state, if true, that: • The capped calls mirror the conversion option embedded in the convertible notes, effectively "hedging" the economic effect of the embedded conversion option.

Rest of the question

• You paid a fixed sum of cash upon execution of the privately negotiated capped call agreements, in exchange for the right to receive either a predetermined amount of cash or stock. • Upon expiration of each agreement, if the closing market price of your common stock is above the initial cap price of approximately $478 per share of Class A common stock, you will have our initial investment returned with a premium in either cash or shares (at your election). • If the closing market price of your common stock is at or below the initial strike price of $370.45 per share of Class A common stock, you will receive the number of shares specified in the agreements. • Please also disclose in future filings any early termination or settlement provisions. Refer to ASC 815-40-50.

The Company advises the Staff that in its future filings with the Commission, beginning with the Q1 2024 Form 10-Q, the Company will enhance its disclosures in the Note titled “Long-Term Debt” of the Company’s Notes to its condensed consolidated financial statements to include the statements specified in the

Staff’s comment, which are accurate with respect to the Company’s 2026 capped calls, as well as to describe the early termination provision of such capped calls. Read in the reply ↗

We note your response to prior comment 1 and reissue. Please provide us with your analysis of the Circle Agreement under Item 601(b)(10)(i) and (ii) of Regulation S-K. In particular, please provide us your analysis of whether the agreement is material to the company within the meaning of Item 601(b)(10)(i) of Regulation S-K.

Rest of the question

In this regard, we note in the six months ended June 30, 2023, you derived 23.7% of your total revenue from the Circle Agreement. In addition, to the extent you believe the agreement is a contract that ordinarily accompanies the kind of business conducted by the company within the meaning of Item 601(b)(10)(ii) of Regulation S-K, please explain your basis for that conclusion. In this regard, we note that you entered into a share transfer agreement on August 18, 2023 to exchange your 50% interest in Centre Consortium LLC to its joint venture partner, Circle US Holdings, Inc., for 3.5% of the fully diluted equity of Circle Internet Financial Limited. Please also provide an updated discussion of why you believe the business is not substantially dependent on the agreement.

The Company advises the Staff that the Circle Agreement does not currently constitute a material contract of the Company within the meaning of Item 601(b)(10) of Regulation S-K and, accordingly, that it is not required to be filed with the Commission. In accordance with Item 601(b)(10)(ii) of Regulation

S-K, the Circle Agreement ordinarily accompanies the kind of business conducted by the Company and its subsidiaries, and therefore is deemed to have been made in the ordinary course and is not required to be filed.

Rest of the answer

The Company’s business operations are directed at increasing economic freedom by providing a trusted platform that makes it easy for customers to engage with crypto assets, both on and offchain. Stablecoins are one of a number of offerings pursuant to which the Company derives revenue and furthers its mission to increase economic freedom in the world. For example, the Company has entered into a distribution agreement with another stablecoin provider.

Moreover, the Company is not “substantially dependent” on the Circle Agreement within the meaning of Item 601(b)(10)(ii)(B) of Regulation S-K. As described in the Company’s response to prior comment 1, the Company’s business is diverse, with numerous sources of revenue, including from trading, stablecoins, blockchain rewards, interest income, and custodial fees. Stablecoin revenue, including the stablecoin revenue that the Company derives through its Circle Agreement, is just one source of the Company’s revenue. Moreover, the percentage of the

Company’s total revenue derived from the Circle Agreement fluctuates period to period. For example, while the Company derived approximately 22% of its total revenue from its arrangements with Circle for the year ended December 31, 2023, this percentage fell to only approximately 12% of the Company’s total revenue for the quarter ended March 31, 2024. The higher percentage of the Company’s revenue for 2023 from its arrangements with Circle was primarily driven by a depressed crypto market and increasing interest rates. Additionally, as previously discussed in the Company’s response to prior comment 1, the Company does not have an exclusive relationship with Circle; there are many alternative stablecoin providers with which the Company can enter into similar arrangements. The Company has a history of entering into partnership agreements with third parties relating to the Company’s revenue generating activities and intends to continue to do so going forward. Accordingly, the Company is not currently substantially dependent on the Circle Agreement and, as a result, the Company does not believe that it is required to file the Circle Agreement as a material contract of the Company within the meaning of Item 601(b)(10) of Regulation S-K.

With respect to the transaction in August 2023 which resulted in the Company obtaining a small ownership interest in Circle, the terms of such transaction were described in detail in Note 11. Prepaid Expenses and Other Current and Non-Current Assets of the Notes to the Company’s consolidated financial statements included in the 2023 Form 10-K, and the Company does not believe that any other details regarding such transaction would be material to the Company’s investors. As disclosed in the 2023 Form 10-K, the Company holds numerous strategic investments in privately held companies in the form of equity securities.

The Company further advises the Staff that it continues to assess the materiality of the various agreements to which it is a party on a regular basis, including to determine whether the Company is substantially dependent on any one party or agreement. To the extent the Company determines in the future that it is substantially dependent on the Circle Agreement such that the Circle Agreement should be filed under Item 601(b)(10) of Regulation S-K, the Company will file the Circle Agreement.

Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at (310) 434-5403, or, in his absence, Michael Brown at (415) 875-2432.

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We note that you have recently entered into a new agreement with Circle Internet Financial. Please file that agreement as a material contract or explain why you are not required to do so.

The Company advises the

Staff that, in August 2023, it entered into an updated arrangement (the “Circle Agreement”) with Circle Internet Financial, LLC (“Circle”).1 The

Circle Agreement does not currently constitute a material contract of the Company within the meaning of Item 601(b)(10) of Regulation S-K and, accordingly, it is not required to be filed with the Commission.

The Circle Agreement is, and the prior revenue sharing arrangements with Circle have historically been, part of the Company’s ordinary revenue generating activities and the Company is not, and has not been,

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substantially dependent on the Circle

Agreement or its prior agreements with Circle. The Company and Circle initially formed a joint venture and entered into a revenue sharing arrangement in 2019. Revenue from those agreements has not historically been significant to the Company. For example, in the years ended December 31, 2022 and December 31, 2021, the Company generated approximately 7.7% and 0.1%, respectively, of its total revenue from its arrangement with Circle. While in the six months ended June 30, 2023, the Company’s revenue from its arrangement with Circle was more significant – the Company derived 23.7% of its total revenue from its arrangement with Circle during such period – the Company advises the Staff that the Company’s business is diverse, with numerous sources of revenue that evolve rapidly and that its revenue mix fluctuates significantly from quarter-to-quarter and year-to-year based on a variety of factors, including those listed in the Company’s periodic reports filed with the Commission, and therefore, the Company is not currently substantially dependent on the Circle Agreement. For example, in the same six months ended June 30, 2023, the Company derived 47% of its total revenue from transaction revenue, 23.4% of its total revenue from subscription and services revenue unrelated to its arrangement with Circle and 5.5% of its total revenue from other sources. The Company further notes that the Circle Agreement does not contain interest income or other economic terms that are materially different from its prior agreements with Circle

In connection with entering into the Circle Agreement, the Company and Circle and their respective affiliates entered into various other ancillary agreements, including an agreement providing for a minority equity investment by the Company into Circle and to terminate the Centre Consortium, which the Company and Circle previously established to manage the governance for USDC. These transactions will be described in the Notes to the Company’s condensed consolidated financial statements for the quarter ended September 30, 2023. While this response focuses solely on the Circle Agreement, which is the only agreement with Circle pursuant to which the Company is generating revenues, the ancillary agreements entered into in connection with the Circle Agreement are similarly not material contracts within the meaning of Item 601(b)(10) of

Regulation S-K.

CONFIDENTIAL TREATMENT REQUESTED BY COINBASE GLOBAL, INC.

and, as result, the Company does not anticipate that entering into the Circle Agreement will impact its previously provided financial outlook. The Company also notes that it does not have an exclusive relationship with Circle; there are many alternative stablecoin providers for which the Company can enter into similar arrangements with and the Company has a history of entering into partnership agreements with third parties relating to the Company’s revenue generating activities and intends to continue to do so going forward. Accordingly, the Company does not believe that it is currently substantially dependent on the Circle Agreement. The Company assesses the materiality of the various agreements to which it is a party on a regular basis, including to determine whether the Company is substantially dependent on any one party or agreement. To the extent the Company determines in the future that it is substantially dependent on the Circle Agreement such that the Circle Agreement should be filed under Item 601(b)(10) of Regulation S-K, the Company will file the Circle Agreement.

While the Circle Agreement is not a material contract within the meaning of Item 601(b)(10) of Regulation

S-K, the Company notes that it has historically included a brief description of its revenue sharing arrangement with Circle in the Notes to its consolidated financial statements and that the Company intends to include a description of the Circle Agreement substantially similar to the following in the Notes to its condensed consolidated financial statements beginning with its Form 10-Q for the quarter ended

September 30, 2023:

“On August 18, 2023, the Company entered into an updated arrangement with Circle Internet Financial,

LLC.

Pursuant to this arrangement, the Company shares interest income earned pro rata based on the amount of USDC held on each respective party’s platform, and from the distribution and usage of USDC after certain expenses. Income derived by the Company from this arrangement is dependent on various factors including the balance of USDC on the Company’s platform, the total market capitalization of USDC, the investment policy of the issuer of USDC and the prevailing interest rate environment.”

Furthermore, beginning with its Form 10-Q for the quarter ended September 30, 2023, the Company will include a separate line item in its disaggregated revenue disclosure noting the revenue derivable from the Circle Agreement. Given such disclosures, as well as existing disclosures in the Company’s risk factors regarding the Company’s relationship with Circle, the Company believes that investors have all of the material information regarding the Circle Agreement.

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Please revise your filing to provide the address of your principal executive offices.

The Company advises the Staff that since May 2020 the Company has been, and continues to be, a remote-first company with no headquarters or principal executive offices. Furthermore, the Company’s executive team and Board of Directors (the “Board”) are distributed. Since May 2020, all Board meetings have been held virtually with the exception of one meeting in 2023, which was held at a location that was not in the Company’s offices.

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Substantially all of the Company’s executive team meetings are also held virtually, with meetings occasionally held in-person at locations that are either not in the Company’s offices or in various of the Company’s offices distributed around the world. The Company holds all of its stockholder meetings virtually. The

Company’s employees are distributed across over 40 states and ten countries. Because it does not have a headquarters or principal executive offices, the Company currently includes a footnote on the cover page of its periodic and current reports filed with the Commission providing that stockholder communications be directed to an email address set forth in the Company’s proxy materials and/or identified on the Company’s investor relations website and, beginning with its Form 10-Q for the quarter ended

September 30, 2023, the Company will update this footnote to further provide such email address, as well as the address of its agent for service of process in the state of Delaware, for purposes of receiving physical mailings from its stockholders and regulatory communications from the Commission.

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Please provide greater details regarding your users and describe the use of digital engagement practices in connection with your platform, including, as examples, only, behavioral prompts, differential marketing, game-like features and other design elements or features designed to engage with retail investors.

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Please also address the following, without limitation: • Specifically describe the analytical and technological tools and methods you use in connection with such practices and your use of technology to develop and provide investment education tools; • Clarify whether any of such practices encourage retail investors to invest in different products or change investment strategies; • Clarify whether you use any optimization functions (e.g., to increase platform revenues, data collection and customer engagement); • To the extent your use of any optimization functions may lead to potential conflicts between your platform and investors, please add related risk factor disclosure; and • Describe in greater detail your data collection practices or those of your third-party service providers. Please include a separate risk factor discussing the current and potential future regulatory risks associated with your use of digital engagement practices. In that regard, please consider the SEC's request for information and public comment on matters related to the use of such practices made on August 27, 2021.

The Company directs the Staff to the “Glossary to the Cryptoeconomy” on pages 2-4 of the Form 10-K for the Company’s definitions of “consumers,” “developers” and “institutions,” which constitute Coinbase’s three customer groups. In response to the Staff’s comment, the Company will revise its definition of “consumers,” who represent the Company’s retail customers and the Company’s primary customers, in future filings with the

Commission beginning with its Form 10-K for the year ending December 31, 2023 in substantially the form as follows (new text in blue, deletions in red): “Consumers:

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Individual usersretail user customers with an account on our platform. In order to create an account and avail themselves of the services on our platform, among other requirements, individuals must certify that they are at least eighteen (18) years of age, agree to our user agreement for consumers, satisfy the requirements of our robust KYC program, and have read our privacy policy.”

The

Company advises the Staff that it uses the digital engagement practices described below in connection with its platform. These practices vary across jurisdictions as a result of applicable laws and regulations. The Company further advises the Staff that its products and services are designed to enable consumers to participate in the cryptoeconomy by acquiring, storing and using crypto assets. In furtherance of the Company’s mission of increasing economic freedom in the world, it also offers educational materials and other features intended to educate the general public about the cryptoeconomy and to help consumers successfully manage their crypto assets. These educational offerings are based on the Company’s belief that financial education, including education about the cryptoeconomy, is an essential building-block in achieving global economic freedom.

Such educational resources are offered both on the Company’s website and through in-app resources for its consumers.

The Company’s products, services and educational offerings incorporate a holistic, customer-centric set of digital engagement practices, including: recommendations, incentives, notifications, educational content and relevant news. The Company’s digital engagement practices are primarily designed to promote financial literacy and awareness and to provide consumers with the guidance and information they need to make better informed decisions about their crypto activity. However, some of the Company’s digital engagement practices may result in consumers trading in different products or adjusting their financial strategy.

Examples of the Company’s offerings that demonstrate how it uses insights into its consumers’ needs to promote better financial literacy and to provide guidance include, among others:

Educational Materials: Consistent with its mission, the Company provides financial education and guidance to its consumers and the general public intended to help individuals successfully manage their crypto. The Company maintains an online collection of how-to guides and tutorials, which are designed to provide readers with educational materials relating to the cryptoeconomy. These materials are available to the public for free and are regularly updated. The Company also publishes a newsletter on crypto developments, Coinbase Bytes. Certain consumers are eligible to participate in Learning Rewards, a video content-driven educational platform available on the Coinbase app and the Company’s website, through which they can earn small rewards, paid out in cryptocurrency, upon successful completion of a video and a short quiz on a range of topics relating to the cryptoeconomy. The Company believes that its consumers prefer and benefit from educational content delivered in-context, as they are using its app or website. In order to encourage participation in the cryptoeconomy, the Company has designed the user interface across both the Coinbase app and its website to ensure clear and conspicuous communications, with additional help and details generally located one hyperlink away. As consumers and the general public engage with this content, the Company also gains insights into how to optimize the information presented in future videos or articles so as to increase engagement with its products and services and provide more customized education to its customers. The more time consumers spend accessing the platform and its range of financial education resources, the more informed and the better equipped the

Company believes they will be to achieve their crypto goals. The Company believes its efforts to reach consumers through clearly communicated educational content and guidance aligns its interests with theirs and helps create more value for its consumers.

In-App Engagement: The Coinbase app provides consumers with a single platform to acquire, store and use crypto. The Coinbase app includes features designed to enable consumers to start small and build their crypto asset holdings with confidence over time. The Company offers incentives to increase consumer awareness and knowledge around certain cryptocurrencies or transaction types. For example, it offers rewards to new consumers in connection with their completion of certain milestones, such as a consumer’s first trade or a USDC cashback amount based on trading volume executed during a promotion period. These offerings can have the effect of driving consumer engagement and therefore revenue.

Targeted marketing: The Company’s marketing efforts include a range of digital engagement practices aimed at driving new and existing consumers to engage with its products and services. Examples include: paid digital and social media marketing campaigns, as well as email campaigns; search engine optimization;

in-app banners; push and pop-up notifications; paid search; and affiliate marketing and sweepstakes.

As explained in its Global Privacy Policy, the Company collects personal data about consumers in connection with their use of its products and services. This includes basic account information, such as a consumer’s contact details, and other identifying information. For consumers that engage in transactions through the Coinbase platform, the Company collects the information necessary to comply with applicable know-your-customer and anti-money laundering laws and to facilitate those transactions. It also collects information about how consumers interact with its services in order to provide and improve those services, protect the platform’s security and integrity, communicate with consumers when needed, and comply with applicable legal requirements. The Company’s third-party service providers are required by the Company to have similar limitations in place with respect to their collection and use of consumer data.

By creating an accessible, informative and personalized cryptocurrency platform, the Company engages consumers and provides financial education and guidance that it believes benefits consumers. The Company’s digital engagement practices are designed to promote financial literacy and awareness and to provide consumers with guidance and information they need to make better informed decisions about their crypto holdings.

The Company will update the fifth paragraph of the risk factor titled “We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition” beginning with its Form 10-Q for the quarter ended September 30, 2023 in substantially the form as follows (new text in blue, deletions in red):

“Because we have offered and will continue to offer a variety of innovative products and services to our customers, many of our offerings are subject to significant regulatory uncertainty and we from time to time face regulatory inquiries regarding our current and planned products. For instance, we are a founding member of the Centre Consortium and a reseller of USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars. The regulatory treatment of fiat-backed stablecoins is highly uncertain and has drawn significant attention from legislative and regulatory bodies around the world. The issuance and resale of such stablecoins may implicate a variety of banking, deposit, money transmission, prepaid access and stored value, anti-money laundering, commodities, securities, sanctions, and other laws and regulations in the United States and in other jurisdictions. Moreover, in October 2021, the President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the

Currency, issued a joint report that recommended legislation that would subject stablecoin issuers and wallet providers to increased federal oversight. There are substantial uncertainties on how these requirements would apply in practice, and we may face substantial compliance costs to operationalize and comply with these rules. Moreover, our products and services incorporate digital engagement, including recommendations, incentives, notifications, educational content and relevant news. Legislators and regulators in jurisdictions in which we operate have solicited comment from the public or proposed or adopted laws or regulations relating to the use of gamification, predictive analytics or other digital engagement features or practices in various products and services, including potential conflicts of interest

CONFIDENTIAL

TREATMENT REQUESTED BY COINBASE GLOBAL, INC.

that may arise as a result of such practices. If such laws or regulations are adopted in jurisdictions in which we operate and deemed to apply to the products and services we offer, we could be required to change the way we market our offerings and interact with existing and prospective customers or modify certain features contained within our products and services, any of which could adversely impact our business, operating results and financial condition. Certain products and services offered by us that we believe are not subject to regulatory oversight, or are only subject to certain regulatory regimes, such as Coinbase Wallet, a standalone mobile application that allows customers to manage their own private keys and store their crypto assets directly on their mobile devices, may cause us to be deemed to be engaged in a form of regulated activity for which licensure is required or cause us to become subject to new and additional forms of regulatory oversight. We also offer various staking, rewards, and lending products, all of which are subject to significant regulatory uncertainty, and could implicate a variety of laws and regulations worldwide. For example, there is regulatory uncertainty regarding the status of our staking, lending, rewards, and other yield-generating activities under the U.S. federal and state securities laws. While we have implemented policies and procedures, including geofencing for certain products and services, designed to help monitor for and ensure compliance with existing and new laws and regulations, there can be no assurance that we and our employees, contractors, and agents will not violate or otherwise fail to comply with such laws and regulations. To the extent that we or our employees, contractors, or agents are deemed or alleged to have violated or failed to comply with any laws or regulations, including related interpretations, orders, determinations, directives, or guidance, we or they could be subject to a litany of civil, criminal, and administrative fines, penalties, orders and actions, including being required to suspend or terminate the offering of certain products and services. Moreover, to the extent our customers nevertheless access our platform, products or services outside of jurisdictions where we have obtained required governmental licenses and authorization, we could similarly be subject to a variety of civil, criminal, and administrative fines, penalties, orders and actions as a result of such activity.”

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We note your disclosure that your customers are represented in over 100 countries, with the largest concentration in the United States of roughly 40%, followed by the UK/Europe of roughly 25%. We also note from your disclosure of revenue by geographic location on page 157, that revenues from customers domiciled in the United States has increased from approximately 75% in 2020 to 80% in 2021 to 84% in 2022.

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In order to provide investors with how your customer base is developing and driving your business results, please enhance your disclosure to present, for the periods presented, customers by type and country in a table format, disaggregating for 10% or more individually and disclose in a footnote the countries combined in "Other." Provide us with your proposed disclosure.

to the Staff’s comment, the Company notes that the disclosure in the Form 10-K regarding geographic location by customers was based on its verified user metric which, beginning with the Company’s Form 10-Q for the quarter ended March 31, 2023, it no longer reports. As the

Company noted in the Form 10-K, the verified user metric did not track users leading to revenue generation and, as a result, was not indicative of the Company’s overall performance, including with respect to the Company’s revenue and operating results. Accordingly, the Company determined to no longer report such metric.

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Similarly, the Company believes that providing customer information by geography is not useful information to investors and is potentially misleading as current and expected revenue may be immaterial in a geography even where there are a significant amount of verified users and, as a result, is not indicative of the Company’s overall performance, including with respect to the Company’s revenue and operating results. In the Company’s Notes to its consolidated financial statements, in accordance with the guidance in Accounting Standards Codification (“ASC”) 280-10-50-41(a), the Company already presents disaggregated revenue for individual countries that accounted for more than 10% of total revenue, which the Company believes is more useful disclosure for investors because it is indicative of the geographies that drive the Company’s revenue. For more information, see Note 5. Revenue, of the Notes to the Company’s consolidated financial statements in the Form 10-K. Furthermore, the

Company notes that this Note in the Form 10-K also presents revenue by customer type and beginning with its Form 10-Q for the quarter ended September 30, 2023, the

Company will additionally include disclosure in Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosing revenue derived from each of its customer types (i.e., consumer and institutional) as well as for geographies that exceed 10% of total revenue. For the foregoing reasons, in its Form 10-K for the year ending December 31, 2023, and consistent with the Company no longer reporting verified users, the

Company intends to remove the disclosure regarding the concentration of customers by geography because it does not believe such information is useful to investors.

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Please substantiate or revise your disclosure that your products and services are “safe” and

The Company advises the Staff that for similar reasons that were communicated by the

Company in its letter to the Staff dated December 21, 2020 in response to the comments of the Staff contained in the Staff’s letter to the Company dated December 7, 2020, regarding the Company’s belief that it has a “trusted platform,” the Company continues to believe it has a reasonable basis to state that its products and services are “safe” and “trusted”.

The Company has conducted a number of studies over the years that have specifically asked its customers to comment on their perception of

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the

Company’s trustworthiness. Most recently, in December 2022, the Company commissioned a third party to conduct a study of individuals who had, in the past year, traded cryptocurrency to (a) determine whether these individuals were aware of the

Company as a cryptocurrency platform, and (b) evaluate whether the Company is the most trusted platform. Of those surveyed, 42.7% identified the Company as the most trusted cryptocurrency platform, which was three times more trustworthy than the next nearest platform offering cryptocurrency exchange services.

In addition, thousands of institutions, including some of the largest and most sophisticated institutions, use the Company’s platform to hold and transact in digital assets, many of whom the Company believes chose to hold and transact through the Company’s platform due to its implementation of security practices robust enough to meet the policies and requirements of traditional financing services firms, its strict adherence to regulatory compliance as one of the few entities the Company is aware of that holds a virtual currency license from the New York Department of Financial Services, its registration as a money services business with the U.S. Financial Crimes Enforcement Network, and its compliance with the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001. To meet regulatory requirements and ensure the security of its platform, the Company has dedicated nearly 20% of its full-time workforce to legal, compliance, finance, and security matters. Further, to ensure the safety of its customers’ assets, as noted in further detail in response to Comment 10 below, the Company secures substantially all of such assets in secure offline storage with institutional grade audits, digital key management (e.g., between June 2023 and September 2023, approximately 98% of customers’ assets were secured in secure offline storage), and physical security, and the Company maintains an insurance policy for assets stored outside of cold storage. The Company also allows customers the opportunity to implement 2-step verification for added security on their accounts and uses multi-party computation to safeguard crypto assets. In addition, the Company has implemented robust infrastructure to support its anti-money laundering and know-your-customer programs, including the use of third-party trade surveillance software to monitor and detect problematic trading activities on its platform. Based on these facts, the Company believes that its statement that its products and services are “safe” and “trusted” is supported.

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Please provide support in a footnote to your BTC Price chart explaining where the data comes from or how it was derived.

The Company acknowledges the Staff’s comment and, to the extent it provides a similar chart in future filings with the Commission, will revise its disclosure to include a footnote substantially similar to the following:

“Historical BTC prices are primarily based on data obtained from our platform. Where such data is not available (e.g., during a platform outage), such data may sometimes be sourced from other third-party exchanges or data providers.” Read in the reply ↗

Please revise to disclose material terms of your staking program, including, but not limited to: • Which crypto assets are used for staking; • The size of staked crypto assets; • How staking rewards are calculated; • Whether staked crypto assets can be used or allocated, and if so how; • Whether you take custody of or hold staked crypto assets; and • Any risks associated with staking and the impact of those risks to

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investors. In responding to this comment, please include a materially complete description of the program.

to the Staff’s comment, the Company advises the Staff that it will revise the disclosure in its Form 10-K for the year ending December 31, 2023 to add disclosure substantially similar to the following regarding its staking program, as may be updated with respect to additional 2023 developments, including quantitative information with respect to 2023 (new text in blue):

“Beyond trading, one of the most popular transactions consumers often engage with is earning a yield on their crypto assets.

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We enable our customers to earn yield on their crypto assets in multiple ways, including via staking rewards, DeFi yield and other methods unique to certain crypto assets. Certain blockchain protocols, such as Ethereum, rely on staking, an alternative way to validate blockchain transactions. Network participants, in this case Coinbase, can designate a certain amount of their crypto assets on the network to validate transactions and get rewarded in kind from the network. Today, staking crypto assets is a technical challenge for most consumers. Staking independently requires a participant to run their own hardware, software, and maintain close to 100% up-time. We provide a true, on-chain proof-of-stake service, which reduces the complexities of staking and allows our consumers to maintain full ownership of their crypto assets while earning staking rewards. In return, we earn a commission on all staking rewards received. Subject to jurisdiction, we currently support six staking assets through the Coinbase app: Cardano (ADA), Cosmos (ATOM),

Polkadot (DOT), Ethereum (ETH), Solana (SOL), and Tezos (XTZ). As of December 31, 2022, approximately $3.5 billion worth of these assets were held on behalf of individual consumers staked through the Coinbase app. In addition to operating our own validator nodes to provide staking services, we utilize third-party service providers to operate validator nodes on our customers’ behalf.

Because staking rewards depend on the relevant protocol and network conditions, the estimated rewards rate for each asset made available for staking is displayed on our website and through the Coinbase app, and is calculated by periodically consulting onchain data to determine the total amount earned by our stakers. We only facilitate staking of a user’s crypto in response to a direct instruction from that user, and it remains the property of the user while staked, and a user’s staked crypto remains in our custody. According to certain protocol rules, staked crypto cannot be sold or transferred while it remains staked and we do not use or allocate users’ staked crypto for any other purpose.”

The Company further advises the Staff that it currently discloses the risks associated with staking and the impact of those risks to investors of the Company in the following risk factor on page 53 of the Form 10-K: “We may suffer losses due to staking, delegating, and other related services we provide to our customers.”

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We note that in addition to operating staking nodes, upon customers’ instructions, you may delegate your customers’ assets to third-party service providers. Please disclose the material terms of your agreements with the third-party service providers you reference and identify them.

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In addition, please separately disclose any revenue from users of your platform staking and delegating their crypto assets to your validator nodes, and, as applicable, to third-party validators.

The Company advises the Staff that while it may delegate its customers’ assets to third-party validator operators for staking, the

Company’s revenue from staking by third-party validator operators has not historically been material. For the year ended December 31, 2022, revenue from these arrangements was $[*], less than [*]% of the Company’s retail staking revenue or less than [*]% of the Company’s total revenue.

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Furthermore, the Company works with a number of third-party validator operators and is not dependent on any specific provider to provide these services and, aside from the operators the

Company is already working with, there are many other providers that provide such services. The Company notes that as of December 31, 2022 only one third-party validator operator - Attestant - had staked over 10% of the assets staked through the Company’s platform. Attestant had approximately [*]% of assets staked through the Company’s platform as of December 31, 2022. Accordingly, the Company does not believe that information with respect to these third-party validator operators, the agreements with these parties, or their identity is material to an investor in the Company. The Company will continue to evaluate its disclosure as it relates to the Company’s third-party validator operators in future filings with the Commission to the extent such arrangements become material.

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Please revise to include a comprehensive breakeven analysis for your validator operations that compares the cost to earn one crypto asset with the value of the crypto asset.

The Company advises the Staff that it does not manage its business to such a breakeven analysis and does not track such an analysis for its validator operations. The Company is unable to quantify such costs with precision; however, the Company advises the Staff that fees paid to third-party validator operators have been immaterial, incurring approximately $2.4 million in fees paid to third-party validator operators in 2022. Therefore, the Company does not believe that providing a comprehensive breakeven analysis for the

Company’s validator operations would be useful or material to investors.

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The Company will continue to evaluate its disclosure as it relates to the Company’s validator operations in future filings with the Commission to the extent such operations become material.

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We note that you offer both a custodial solution with the Coinbase application and self- custodied solution with Coinbase Wallet. We also note that your web3 wallet “shares the responsibility of knowing and storing the customer’s security key between the consumer and Coinbase,” while your Coinbase Wallet gives consumers sole control over their private keys and seed phrase.

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We further note your disclosures on pages 12, 47, 64 and 102 regarding your custodial practices, including that you hold customer custodial funds and cash and cash equivalents at certain third-party banks. Please revise to further describe your custodial practices for crypto assets, including the items below: • Discuss the risks and benefits associated with your web3 wallet versus the Coinbase Wallet; • Discuss what portion of the crypto assets are held in hot wallets and cold wallets, respectively, and whether there are differential storage practices with regard to Coinbase's own crypto asset holdings versus customers’; • Disclose the geographic location where the crypto assets are held in cold wallets and how the private keys are located; • Identify any custodians and discuss the material terms of any agreements you have with them; • Identify the person(s) that have access to the crypto assets and whether any persons (e.g., auditors, etc.) are responsible for verifying the existence thereof. Also clarify whether any insurance providers have inspection rights associated with the crypto assets held in storage; • Identify the person(s) that have the authority to release the proceeds from your wallets; and • Discuss how the existence, exclusive ownership and software functionality of private digital keys and other ownership records are validated by the relevant parties.

to the Staff’s comment, the Company advises the Staff that it will revise the disclosure under the section “Item 1. Business—Our Business—Consumers—Web3 Wallet” beginning with its Form 10-K for the year ending

December 31, 2023 to provide disclosure to note the key risks and benefits associated with the Company’s web3 wallet substantially similar to the following: “A benefit of the web3 wallet is that because the wallet is protected by two separate security keys (one held by the consumer and one by us), the consumer benefits from two-layered security and we are able to assist with wallet

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recovery in cases where a user loses their private key.

However, despite those safeguards, the user can still become permanently locked out of the wallet and the user’s control of the wallet can still be compromised, such as if the user does not secure their account credentials.”

The Company further advises the Staff that it will also revise the disclosure under the section “Item 1. Business—Our Business—Consumers—Coinbase Wallet” beginning with its Form 10-K for the year ending December 31, 2023 to provide disclosure to note the key risks and benefits associated with Coinbase Wallet substantially similar to the following: “A benefit of Coinbase Wallet is that consumers have sole control over their private keys and seed phrase, which are stored directly on their mobile devices and not with a centralized exchange. However, if a Coinbase Wallet user loses their key or seed phrase, then we are unable to assist in recovery.”

Additionally, the Company will add disclosure substantially similar to the following beginning with its Form

10-K for the year ending December 31, 2023 regarding its custodial practices:

“Our Custodial

Practices

We offer consumer and institutional customers a variety of custodial solutions, and utilize both hot wallets and cold wallets. We actively manage wallet balances and generally seek to hold no more than 2% of custodied assets in hot wallets at any given time. Cold wallet private key materials are stored and secured at facilities within the United States and Europe.

We store the substantial majority of our own crypto asset holdings utilizing the same storage solutions that we provide to our customers. In limited cases, we use storage solutions not offered to our customers to store immaterial amounts of crypto held for corporate purposes outside of our core custodial product offerings. Additionally, our Coinbase Asset Management offering utilizes both Coinbase and third parties as custodians.

As part of our risk mitigation efforts, wallet private keys are not stored in plaintext format in any location and the cryptographic consensus of multiple human operators is required to decrypt a private key for both hot and cold wallets. No single individual has control of Coinbase’s wallet private keys. To the extent a customer withdrawal requires movement of assets from a cold wallet, authority to release proceeds from such wallet resides with a geographically distributed team of professionals, all of whom are subject to background checks as part of the onboarding process.

We perform internal audits of the private key management process and reconciliations between Coinbase wallets and third-party blockchain data.

Coinbase, Inc. and Coinbase Custody Trust Company, the two subsidiaries that custody the majority of crypto assets on platform, are also periodically examined by a variety of regulators, including NYDFS and various states in which such entities hold money transmission licenses. In the event of an insurable loss of assets for which we file a claim, we may be expected to allow our insurance providers to inspect custodied assets in the course of their investigation of such claim.

We do not use sub-custodians in connection with the storage of digital assets. In accordance with applicable state money transmitter laws, we hold customers’ cash at FDIC-insured depository institutions and in money market funds in accounts explicitly named to further demonstrate that we are holding the funds as custodian, not principal. We believe the terms of the relevant account agreements to be comparable to those offered to similar companies.”

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We note your disclosure that you “may seek to provide advanced risk management services where Coinbase acts principally to facilitate transactions.” Please revise to describe the services that you refer to.

to the Staff’s comment, the Company advises the Staff that since its disclosure in the Form

10-K, the Company’s activity with respect to the provision of separate advanced risk management services to sophisticated institutional clients where the Company acts principally to facilitate client activities has been very limited. Moreover, revenue from these services has been immaterial to the Company’s total revenue.

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The Company will continue to evaluate its disclosure as it relates to the Company’s advanced risk management services in future filings with the Commission to the extent such services become material.

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We note your disclosure on page 8 that your consumers are represented in over 100 countries, and your statement in this section that you have “robust know-your-customer and anti-money laundering programs.” Please revise to disclose: • Whether all Coinbase products and services are available to all customers regardless of jurisdiction, or any limitations on offerings in certain jurisdictions; • More detailed

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description of your KYC and AML programs; • How Coinbase ensures compliance with laws and regulations in the various jurisdictions in which it operates or offers products and services; • Any material risks you face from unauthorized or impermissible customer access to your products and services outside of those jurisdictions; and • Any material risks you face related to the assertion of jurisdiction by U.S. and foreign regulators and other government entities over crypto assets and crypto asset markets.

to the Staff’s comment, the Company advises the Staff that the Company will add disclosure substantially similar to the following beginning with its Form 10-K for the year ending December 31, 2023, as may be updated with respect to additional 2023 developments (new text in blue, deletions in red):

“Anti-money laundering and counter-terrorist financing

We are subject to various anti-money laundering and counter-terrorist financing laws, including the Bank Secrecy Act (the “BSA”) in the United States, and similar laws and regulations abroad.

Rest of the answer

In the United States, as a money services business registered with the Financial Crimes Enforcement Network

(“FinCEN”), the BSA requires us to among other things, develop, implement, and maintain a risk-based anti-money laundering program, provide an anti-money laundering-related training program, report suspicious activities and transactions to

FinCEN, comply with certain reporting and recordkeeping requirements, and collect and maintain information about our customers. In addition, the BSA requires us to comply with certain customer due diligence requirements as part of our anti-money laundering obligations, including developing risk-based policies, procedures, and internal controls reasonably designed to verify a customer’s identity. Many states and other countries impose similar and, in some cases, more stringent requirements related to anti-money laundering and counter-terrorist financing. We have implemented aOur compliance program is designed to prevent our platform from being used to facilitateand detect instances of money laundering, terrorist financing, and other illicit activity on our platform. It is also designed to prohibit use of Coinbase in countries, or withby persons or entities, included on designated lists promulgated by the

Office of Foreign Assets Control (“OFAC”), and equivalent foreign authorities. Our compliance programIt includes policies, procedures, reporting protocols, and internal controls, and is designed to address legal and regulatory requirements as well as to assist us in managing risks associated with money laundering, and terrorist financing. As part of our compliance program, we limit the use of our products and services to jurisdictions where we are legally able to offer our products and services, and customers can only use our products and services in the specific jurisdictions we have approved. We enforce such geographic restrictions though various onboarding and login controls to limit a customer from accessing products or services outside of their jurisdiction. Additionally, we have a robust know-your-customer (“KYC”) program, which is a central part of our anti-money laundering program. Our KYC program is governed by our global KYC policy that covers customer onboarding, and includes customer due diligence; calculation and assessment of customer risk rating; application of enhanced due diligence on high risk customers; and screening customers against sanctions lists. Following the customer onboarding process, we perform ongoing monitoring of customers and transaction activity to ensure that potentially suspicious activities, including possible sanctions violations, are appropriately detected, and when appropriate, reported. Anti-money laundering regulations are constantly evolving and vary from jurisdiction-to-jurisdiction. We continuously monitor our compliance with anti-money laundering and counter-terrorist financing regulations and industry standards and implement policies, procedures, and controls in light of the most current legal requirements.

For a description of the risks we may face from (i) unauthorized or impermissible customer access to our products and services outside of jurisdictions where we have determined to make such products and services available or (ii) an assertion of jurisdiction over our operations or the crypto assets we offer by U.S. and foreign regulators and other government entities, see the following risk factors in the section titled “Risk Factors”: (i) “We are subject to an extensive, highly-evolving and uncertain regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition”; (ii)

“As we continue to expand and localize our international activities, our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering”; and (iii) “A particular crypto asset, product or service’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.”

Part II

Item 7.

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Please enhance your Management's Discussion and Analysis of Financial Condition and Results of Operations to provide a more fulsome discussion of the underlying drivers, correlations between drivers and impact to trends and changes thereof, that impact your financial condition, results of operations and cash flows.

Rest of the question

For example, we note the following: • Consumer transactions were approximately 95% of net revenue in both 2022 and 2021 but only 20% of trading volume in 2022 compared 32% in 2021. • Institutional trading volume declined less than consumer trading despite the decrease in crypto asset volatility of 32% for the year ended December 31, 2022, and no significant change in the mix of trading volume or transaction revenue by crypto asset type. • Your discussion does not address how and if consumer and institutional products, as discussed on pages 8 thru 10 impact operating metrics and results. • Your discussion does not address how and if the more than 100 countries in which customers participate impact operating metrics and results. • You disclose that the decline in transaction revenue is attributable to declines in trading volume, crypto market capitalization, average crypto prices and volatility which appear to be correlated but do not discuss the reason and or cause for the related declines. • You disclose a number of factors that contribute to changes in crypto asset prices and crypto asset volatility, including, but not limited to, changes in the supply and demand for a particular crypto asset, crypto market sentiment, macroeconomic factors, utility of a particular crypto asset, and idiosyncratic events, but you do not address the impact to operating metrics and results. • Your quantitative disclosure of revenue is on a total combined basis whereas your key business metrics discussion is disaggregated between consumer and institutional. • Interest income increased from $26 million in 2021 to $327 million and 10% of total revenue in 2022 but your discussion does not address the impact to future (interest income) trends.

REQUESTED BY COINBASE GLOBAL, INC.

Consumer transactions were approximately 95% of net revenue in both 2022 and 2021 but only 20% of trading volume in 2022 compared 32% in 2021.

Institutional trading volume declined less than consumer trading despite the decrease in crypto asset volatility of 32% for the year ended December 31, 2022, and no significant change in the mix of trading volume or transaction revenue by crypto asset type.

Your discussion does not address how and if consumer and institutional products, as discussed on pages 8 thru 10 impact operating metrics and results.

Your

Rest of the answer

discussion does not address how and if the more than 100 countries in which customers participate impact operating metrics and results.

You disclose that the decline in transaction revenue is attributable to declines in trading volume, crypto market capitalization, average crypto prices and volatility which appear to be correlated but do not discuss the reason and or cause for the related declines.

You disclose a number of factors that contribute to changes in crypto asset prices and crypto asset volatility, including, but not limited to, changes in the supply and demand for a particular crypto asset, crypto market sentiment, macroeconomic factors, utility of a particular crypto asset, and idiosyncratic events, but you do not address the impact to operating metrics and results.

Your quantitative disclosure of revenue is on a total combined basis whereas your key business metrics discussion is disaggregated between consumer and institutional.

Interest income increased from $26 million in 2021 to

$327 million and 10% of total revenue in 2022 but your discussion does not address the impact to future (interest income) trends.

The Company acknowledges the Staff’s comment and advises the Staff that beginning with its Form

10-Q for the quarter ended September 30, 2023, it will enhance its Management’s Discussion and Analysis of Financial Condition and Results of Operations to provide a more fulsome discussion of the underlying drivers, correlations between drivers and impact to trends and changes thereof, that impact the Company’s financial condition, results of operations and cash flows.

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Please enhance your disclosures to further disaggregate transaction expense, technology and development, general and administrative and other operating expenses net to provide investors with a quantified understanding of significant underlying components of these line items that are material to your operations.

Rest of the question

Your current disclosures only provide an explanation of the year-over-year change and the nature of and drivers of current year activity are unclear. Further, enhance your disclosures to clarify the impact of material changes on future operating trends. Refer to Item 303(b)(2) of Regulation S-K and Section III.D of SEC Release No. 33-6835. Provide us with your proposed disclosure.

The Company acknowledges the Staff’s comment and advises the Staff that it has reviewed Item

303(b)(2) of Regulation S-K and Section III.D of SEC Release No. 33-6835 and that beginning with its Form 10-Q for the quarter ended September 30, 2023, it will enhance its Management’s Discussion and Analysis of Financial Condition and Results of Operations to include tabular disclosure of its disaggregated operating expenses and a more fulsome narrative discussion of the nature and drivers of current year change in addition to discussion regarding year-over-year change.

Rest of the answer

The Company further advises the Staff that its enhanced disclosures will address and clarify the impact of material changes on future operating trends.

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We note your non-GAAP measure of Adjusted EBITDA which you disclose you use to evaluate your ongoing operations and for internal planning and forecasting purposes, including that you believe that Adjusted EBITDA may be helpful to investors because it provides consistency and comparability with past financial performance.

Rest of the question

We also note that Adjusted EBITDA is calculated as net loss or income, adjusted to exclude provision for or benefit from income taxes, depreciation and amortization, interest expense, crypto asset borrowing costs, stock-based compensation expense, crypto asset impairment, net, impairment on investments, net, other impairment, non-recurring Direct Listing expenses, restructuring, change in unrealized foreign exchange, fair value gain or loss on derivatives, non-recurring legal reserves and related costs, and other adjustments, net. Please address the following: • Please tell us how your adjustment for crypto asset impairment, net, in your non- GAAP measure Adjusted EBITDA is a non-recurring charge as the volatility of your crypto assets appear to be triggering frequent impairment charges for these ASC 350 intangible assets. In your response, tell us your consideration of the following:o Your disclosure on page 69 (and page 123 of your 10-Q for the quarter ended June 30, 2023) that you may continue to record impairment charges on the crypto assets you hold due to the high volatility in crypto asset prices and the crypto economy. o Your disclosure of the recurrence of these impairment charges on page 162 as gross impairment charges of $757.3 million, $329.2 million and $8.4 million during the years ended December 31, 2022, 2021 and 2020 respectively, due to the observed market price of crypto assets decreasing below the carrying value during the respective periods. o The high likelihood that these crypto impairment charges will recur due to volatility in relation to Rule 100(b) of Regulation G, and Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. • Also tell us how your non-GAAP adjustments to Adjusted EBITDA for crypto asset borrowing costs, impairment on investments, fair value gain or loss on derivatives, and other adjustments, net, are consistent with Questions 100.01 of the Non-GAAP Financial Measures C&DI and Item 10(e)(1)(i) of Regulation S-K, including how they are not indicative of your financial performance considering purchase of investments, including crypto, are recurring, and that you are the principal in the sale of crypto assets as an accommodation to customer transactions.

to the Staff’s comment, the Company advises the Staff that, with respect to the

Company’s adjustment of crypto asset impairment, net in its Adjusted EBITDA non-GAAP financial measure, as discussed in the Company’s periodic filings, the Company’s crypto assets are accounted for as indefinite lived intangible assets under the provisions of ASC Topic 350, Intangibles – Goodwill and Other (“ASC 350”).

Rest of the answer

Pursuant to ASC 350, indefinite-lived intangible assets are initially recorded at their historical cost and subsequently tested for impairment at least annually, or more frequently if events or circumstances exist that indicate impairment has more likely than not occurred. Such events or circumstances include when the fair value of the asset declines below its recorded carrying value. Applied to crypto assets, the Company evaluates transactions where the same crypto asset is bought and sold by third parties on a market at a price below its current carrying value as recorded in the Company’s financial statements. Given the volatility of crypto assets, the Company continuously assesses its crypto asset holdings for impairment, writing each crypto asset’s carrying value down to the lowest reported price, since its acquisition, on the Coinbase exchange, or other approved pricing source, which serves as the Company’s principal market. Under ASC 350, as currently in effect, impairment charges, including intra-reporting period impairment charges, cannot be reversed once recorded under ASC 350. As a result, subsequent increases in the market price of crypto assets are not reflected in the asset’s reported carrying value on the

Company’s balance sheet, nor are they reflected in the Company’s statement of operations. The Company believes that reflecting cumulative impairment charges on the Company’s financial statements without regard to current market value gains would result in an incomplete assessment of the Company’s crypto asset holdings and is less meaningful to management or investors in light of the crypto assets that the Company holds for investment and operating purposes.

As a result of this, since the Company’s direct public listing, the Company’s Adjusted EBITDA non-GAAP financial measure has excluded crypto asset impairment losses that have not been recovered or realized through subsequent disposals, to better enable a comparison of its performance across reporting periods and to also provide more meaningful information to investors, who may not consider crypto asset impairment, which is a non-cash charge, to be valuable information without equal consideration of subsequent increases in market value. The Company further advises the Staff that while crypto asset impairment, net, is a recurring charge, it represents a non-cash expense and therefore is appropriately excluded from the Company’s Adjusted EBITDA non-GAAP financial measure. Similarly, the Company excludes other non-cash charges from its Adjusted EBITDA non-GAAP financial measure, some of which have been excluded since the Company’s direct public listing, including crypto asset borrowing costs, which is similar in nature to interest expense but is denominated in crypto assets, impairment on investments, and fair value gain or loss on derivatives to provide investors supplemental information with respect to the Company’s liquidity in addition to its GAAP cash flow from operating activities. In the other adjustments, net line item the Company excludes other non-cash or non-recurring items that are not individually material. For example, within such line item, the

Company currently excludes unrealized gains or losses on contingent consideration, a non-cash charge, as well as a write-off of receivables due to the FTX bankruptcy and a non-recurring accrual for value-added tax related to the Company’s Irish operations. In response to the Staff’s comment, the Company will revise its description of Adjusted EBITDA in future filings with the Commission beginning with its Form 10-Q for the quarter ended September 30, 2023 substantially similar to the following to more clearly specify that the aforementioned non-cash charges noted in this response to Comment 15 are recurring in nature or, where applicable, that such charges are non-recurring (new text in blue, deletions in red):

“In addition to our results determined in accordance with GAAP, we believe Adjusted EBITDA, a non-GAAP financial measure, is useful in evaluating our operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA may be helpful to investors because it provides consistency and comparability with past financial performance. However, Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Among other non-cash and non-recurring items,There are a number of limitations related to Adjusted EBITDA rather than net income (loss), which is the nearest GAAP equivalent of Adjusted EBITDA. Some of these limitations are Adjusted EBITDA excludes:

stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;

depreciation and intangible assets amortization expense and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;

interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us;

crypto asset impairment, net, a non-cash expense, which has been recurring, and may in the future recur, although the crypto assets impaired may be sold in the future at a price at or higher than the price the assets have been impaired to;

provision for (benefit from) income taxes;

the impact of restructuring, which is infrequent and not related to normal operations but impacted our results in 2022 and 2023;

the impact of crypto asset borrowing costs, a non-cash expense, which is similar in nature to interest expense on our crypto asset borrowings, which has been recurring, and may in the future recur;

the impact of fair value gain or loss on derivatives, a non-cash expense, which has been recurring, and may in the future recur;

impairment on investments, net, a non-cash expense, which has been recurring, and may in the future recur, although the impaired investments may be sold in the future at a price lower, at or higher than the price the assets have been impaired to;

and non-cash unrealized gains or losses on contingent consideration, a non-recurring write-off of receivables due to the FTX bankruptcy, and a non-recurring accrual for value-added tax related to our Irish operations, which we have consolidated into the line item “other adjustments” because they are not material individually.

In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measuresAdjusted EBITDA differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measuresdisclosure of Adjusted EBITDA as toolsa tool for comparison. A reconciliation is provided below for each non-GAAP financial measure toAdjusted EBITDA to net income (loss), the most directly comparable financial measure stated, in accordance with GAAP. Investors are encouraged to review the related GAAP financial measuresmeasure and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measuresAdjusted EBITDA to net income (loss), and not to rely on any single financial measure to evaluate our business.

We calculate

Adjusted EBITDA as net loss or income, adjusted to exclude provision for or benefit from income taxes, depreciation and amortization, interest expense, crypto asset borrowing costs, stock-based compensation expense, crypto asset impairment, net, loss or gain on investments, net, other impairment, restructuring, gain on extinguishment of long-term debt, net, change in unrealized foreign exchange, fair value gain or loss on derivatives, non-recurring legal reserves and related costs, and other adjustments, net.”

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You disclose in the third footnote to the table of crypo assets disaggregated by cost and fair value on page 114 that your price exposure on Bitcoin and Ethereum held as investments was hedged with futures contracts in the fourth quarter of 2022.

Rest of the question

Please tell us how you accounted for the fair value changes in Bitcoin held with cost of $89.9 million and fair value of $85.8 million, whereas Ethereum held had cost of $43.7 million and fair value of $50.8 million at December 31, 2022. Also tell us if these are the Nano Bitcoin Futures and Nano Ethereum Futures on your Coinbase Derivatives Exchange, as disclosed on page 10, and how these crypto asset futures are accounted for in your Derivatives designated as hedges accounting policy on page 140.

The Company advises the Staff that fair value changes in the Bitcoin and Ethereum that were hedged with futures contracts were recognized in other operating expense, net, in the consolidated statements of operations. The Company further advises the Staff that the futures contracts were not the Nano Bitcoin Futures or Nano Ethereum Futures offered by Coinbase Derivatives Exchange and were futures sold on the Chicago Mercantile Exchange, a registered third-party exchange for trading futures and options.

Rest of the answer

These crypto asset futures were accounted for as derivatives under ASC Topic 815, Derivatives and Hedging, and were designated as fair value hedges.

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Your disclosure of net cash provided by/used in operating, investing and financing activities appears to repeat information already provided in the statement of cash flows. Please provide us with a quantitative and qualitative analysis of the drivers of the change in cash flows between periods and impact to future trends to provide a sufficient basis to understand changes in cash between periods.

Rest of the question

Refer to Item 303(b)(1) of Regulation S-K and Sections 1.B. and IV.B. of Release No. 33-8350 and Release No. 33-10890 for guidance.

In order to further enhance the Company’s discussion of net cash provided by (used in) operating, investing and financing activities, the

Company advises the Staff that it will provide additional disclosure in future filings with the Commission to ensure that it has provided quantitative and qualitative analysis of the material drivers of the change in cash flow between periods and impact to future trends.

Rest of the answer

Below is an example of how the Company intends to further enhance the disclosure in future filings with the Commission beginning with its Form 10-Q for the quarter ended

September 30, 2023, using the identified disclosure from the Form 10-K which compares fiscal year 2022 to fiscal year 2021 (new text in blue, deletions in red, moved text in green):

“Operating activities

Net cash used in operating activities was $1.6 billion for the year ended December 31, 2022. Our net cash used in operating activities reflected a net loss of $2.6 billion, partially offset by non-cash adjustments of

$2.1 billion, which was driven by stock-based compensation expense, crypto asset impairment expense, depreciation and amortization, impairment expense on ventures investments, non-cash lease expense, unrealized losses on foreign exchange, and other impairment expense. This was partially offset by deferred income taxes and realized gains on crypto assets driven by net crypto assets received from operating activities. In addition to these changes were changes in operating assets and liabilities of $1.0 billion.largest source of cash provided by operations are revenues generated from transaction fees, corporate and custodial cash interest income and custodial fees.

Net cash provided by operating activities was

$4.0 billion for the year ended December 31, 2021. Our net cash provided by operating activities reflected net income of $3.6 billion and non-cash adjustments of $272.6 million, which was driven by benefits from deferred income taxes and realized gains on crypto assets driven by net crypto assets received from operating activities. This was partially offset by stock-based compensation expense, crypto asset impairment expense and depreciation and amortization expense. In addition to these changes were changes in operating assets and liabilities of

$141.4 million

Our primary uses of cash from operating activities include payments for website hosting services, payments to employees for compensation, outsourced customer support costs, payments to tax authorities for income taxes, and other general corporate expenditures.

Net cash used in operating activities declined by $5.6 billion primarily due to decreases in revenue from the year ended December 31, 2021 to the year ended December 31, 2022 by $4.6 billion, increased outflows to purchase USDC of $770.7 million to increase our corporate balances at December 31, 2022, offset by decreases in overall working capital needs year-over-year due to our ongoing cost management efforts, net of increased receivables related to our revenue sharing arrangement with the issuer of USDC.

Investing activities

Net cash used in investing activities of $663.8 million for the year ended December 31, 2022 was due to $430.8 million in net outflow for the purchase and sale of crypto assets, $186.2 million in net cash paid in the Unbound Security and FairXchange acquisitions, $63.0 million in investments of companies and technologies and $61.0 million in capitalized internal-use software development costs. This was partially offset by $120.2 million in net inflow for consumer loans repaid and originated.decreased by $460.9 million year-over-year due to:

used in investing activities of $1.1 billion for the year ended December 31, 2021 was due to $435.1 million in net outflow for the purchase and sale of crypto assets, $326.5 million in investments of companies and technologies,

$211.7 million in net outflow for consumer loans originated and repaid, $70.9 million in net cash paid for acquisitions, $60.8 million related to an asset acquisition of technical talent and $22.1 million in capitalized internal-use software development costs.

a decrease in strategic equity investments. In 2021, our overall discretionary investing activity grew significantly as we saw rapid acceleration in the pace of innovation in our industry. This drove higher investment volume and spend as: (i) we saw growth in new company formation and invested broadly across the ecosystem through our venture investing program and (ii) we made select larger corporate investments in companies that provided us with exposure to new or complementary areas of crypto (e.g., geographic regions where we did not operate). Our investing activity significantly declined year-over-year in 2022 as macroeconomic conditions shifted and led to tightening in the broader capital markets. We also significantly reduced corporate investing activity due to a refresh of our strategic priorities in light of market changes. While our investing activity declined in 2022 relative to 2021, with cash outflows of $326.5 million for the year ended December 31, 2021 compared to $63.0 million for the year ended December 31, 2022, we continued to invest at a higher rate than in 2020, both in terms of deal volume and spend, and continue to have an active venture investing program today;

a decrease in net loans originated and repaid as we have seen a decline in consumer demand for these loans due to increasing interest rates and declining crypto assets prices which are used for collateral against these loans thereby decreasing borrowing power;

a decrease in crypto asset purchases and disposals due to our investments in database and network infrastructure to support heightened trading volumes on our platform in order to reduce unanticipated system disruptions; and offset by an increase in our capitalized software costs as we focused efforts on optimizing our platform through investments in database and network infrastructure launching new products, adding payment rails and expanding internationally.

Financing activities

Net cash used in financing activities of $5.8 billion for the year ended December 31, 2022 was due to changes in customer custodial cash liabilities of

$5.6 billion, $351.9 million of taxes paid related to net share settlements of equity awards, and an overall $191.1 million in repayments of short-term borrowings. This was partially offset by $191.0 million of proceeds received from the issuance of short-term borrowings, net of issuance costs, $51.5 million of proceeds from the issuance of common stock from stock option exercises, net of repurchases, and $20.8 million of proceeds received under our employee stock purchase plan.

provided by financing activities of $10.0 billion for15.8 billion change from the year ended December 31, 2021, was primarily due to changesa decrease in customer custodial cash liabilities of $6.7 billion, $2.0 billion of proceeds from5.6 billion as we saw an overall decline in fiat balances held on our platform due to lower customer trading activity as compared to an inflow of $6.7 billion in the prior year, a decrease of net $3.4 billion related to the issuance of our Senior Notes, net of issuance costs and $1.4 billion of proceeds from the issuance of and 2026 Convertible Notes, net of issuances costs, $217.1 million ofwhich did not recur in 2022, a decrease in proceeds from the issuance of Class A and Class B common stock from stock option exercises, net of repurchases, $20.0 million of proceeds fromupon the issuanceexercise of a short-term borrowing, and $19.9 million of proceeds received understock options as our employee stock purchase plan. Thisprice was partiallyat an all time high in 2021 as compared to 2022, coupled with our first year as a public company and the associated liquidity event this provided for holders of our stock options, offset by $262.8an increase of

$89.1 million of taxes paid related to net share settlementsettlements of equity awards anddue to an overall increase year-over-year in the purchasevesting of $90.1 million of capped calls in connection withrestricted stock units as a result of 2021 acquisition awards granted and an overall increase in headcount. Our choice to net settle employee awards and pay taxes is routinely evaluated by management and may change in the 2026 Convertible

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We note that your use of estimates policy, in your summary of significant accounting policies in Note 2 on page 133, discloses items for which the underlying carrying value and valuation involves critical estimates or assumptions, in addition to the revenue recognition, business combinations and income taxes already disclosed.

Rest of the question

Please tell us the • Tell us why you excluded these other "use of estimate" items from your critical accounting estimates; • In your response, for all identified critical accounting estimates or assumptions, provide the following: o include why you determined each has had or could have a significant impact on your financial statements; o the key quantitative inputs and qualitative adjustments made to the baseline estimates; o why each critical accounting estimate is subject to uncertainty; o how much each estimate and/or assumption has changed over the relevant period; and o the sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation. Refer to Release No. 33-8350 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 303(b)(3) of Regulation S-K.

, for all identified critical accounting estimates or assumptions, provide the include why you determined each has had or could have a significant impact on your financial statements;

the key quantitative inputs and qualitative adjustments made to the baseline estimates;

why each critical accounting estimate is subject to uncertainty;

how much each estimate and/or assumption has changed over the relevant period; and the sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation.

Refer to Release No.

Rest of the answer

33-8350 Interpretation: Commission

Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 303(b)(3) of Regulation S-K.

The Company advises the Staff that it excluded certain “use of estimate” items from its critical accounting policies and estimates

(“Critical Accounting Policies and Estimate”) disclosure in the Form 10-K following its determination that certain of the estimates disclosed in its “Significant Accounting

Policies” in Note 2. Summary of Significant Accounting Policies, of the Notes to the Company’s consolidated financial statements for the year ended December 31, 2022 do not, for the reasons described below, rise to the level of critical accounting estimates as they are not reasonably likely to have a material impact on the Company’s financial statements. The Company further notes to the Staff that in its Form 10-K for the year ending December 31, 2023, it intends to add goodwill and intangible assets, including the related impairment, and valuation of privately-held strategic investments, including impairments, as Critical Accounting Policies and Estimate. Further, the Company advises the Staff that not all estimates disclosed in “Significant Accounting Policies” are considered critical to management. Specifically, management does not view estimates that are not considered sensitive or are not related to material balances or having a potential material impact as critical. Below is a list of the accounting estimates disclosed in Note 2. Summary of Significant Accounting Policies, of the Notes to the Company’s consolidated financial statements for the year ended December 31, 2022 and the accompanying reasons why, in management’s view, such accounting estimates do not rise to the level of critical accounting estimates:

Fair Value of Stock-Based Awards. Management concluded that there was no potential for a material impact to the Company’s consolidated financial statements associated with its estimate of the fair value of stock-based awards as the awards that are valued using the Black-Scholes-Merton Option-Pricing Model are not material to the Company’s financial statements and the underlying inputs to the model are based on observable market inputs (i.e. stock volatility, U.S. treasury rate, the Company’s stock price on the date of grant as reported by the Nasdaq Global Select Market

(“Nasdaq”)) and, accordingly, such fair value is not subject to uncertainty, judgment or sensitive assumptions.

Incremental Borrowing Rate (“IBR”). The IBR utilized in the

Company’s ASC 842 analysis would not have a material impact to the Company’s consolidated financial statements, a 10% increase or decrease would have less than a $10 million increase or decrease in the Company’s Lease liability.

The Company further advises the Staff that the IBR comes from a public pricing source, and is thus not subject to uncertainty or judgment.

Fair Value of Customer Crypto Assets and Liabilities. Management concluded that there was no potential for a material impact to the Company’s consolidated financial statements associated with its estimate of the fair value of customer crypto assets and liabilities because these represent an indemnification asset, of which value is derived from other assets that have observable market prices. These assets and liabilities are considered Level 2 and, as a result, the fair value is based on quoted market prices for one unit of the underlying crypto asset. Accordingly, management has assessed this estimate is not subject to uncertainty, judgment or sensitive assumptions.

Contingent Consideration Arrangements. Management concluded that these arrangements, while they do involve estimation, are not material to the Company’s financial statements. As of December 31, 2022 and 2021, contingent consideration arrangements represented only $1.9 million and $14.8 million, respectively.

Fair Value of Derivatives and Related Hedges. Management concluded that there was no potential for a material impact to the Company’s consolidated financial statements associated with its estimate of the fair value of derivative and related hedges as these derivative and related hedges do not present a risk of a material impact to the

Company’s consolidated financial statements. As disclosed in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the Form 10-K, as of December 31, 2021 and 2022, a 10% increase or decrease in the fair value of the Company’s derivative positions would not have had a material impact on the Company’s financial results.

Fair Value of Long-Term Debt. Management concluded that there was no potential for a material impact to the Company’s consolidated financial statements associated with its estimate of the fair value of its long-term debt because these estimates are based on quoted market prices, as there is an active trading market for the Company’s notes and, accordingly, such fair value is not subject to uncertainty, judgment or sensitive assumptions.

Assessing the Likelihood of Adverse Outcomes From Claims and Disputes; and Loss Provisions. Management evaluated and considered this not material or critical for separate disclosure as the Company has not had a history of material adverse outcomes from claims and disputes.

For the reasons noted above these estimates have been omitted from the Company’s Critical Accounting Policies and Estimate disclosure.

Moreover, beginning with its Form 10-Q for the quarter ended September 30, 2023, the Company will remove certain of the estimates noted as significant.

The Company determined that revenue recognition is a critical accounting policy because of the importance of revenue recognition to an investor and because the Company’s revenue is one of the primary metrics which investors use to value the Company. The Company determined that business combinations, goodwill and intangible assets, valuation of privately-held investments and income taxes, are critical accounting policies because such policies involve significant judgment, estimates and assumptions and, to the extent that the Company’s estimates and assumptions with respect to these critical accounting policies change if actual circumstances differ from those in the assumptions, the Company’s financial statements could be materially impacted.

The Company will further revise disclosures regarding critical accounting policies and the use of estimates to include further qualitative and quantitative discussion of the changes between periods and of the sensitivity of reported results to changes in assumptions, judgments, and estimates, as suggested by the Staff, beginning with its Form 10-K for the year ending December 31, 2023 in substantially similar form to the following (new text in blue, deletions in red):

“Revenue recognition—We determined that revenue recognition is a critical accounting policy because of the importance of revenue recognition to an investor and because our revenue is one of the primary metrics which investors use to value our business. We primarily generate revenue through transaction fees charged on our platform. We charge a fee at the transaction level. The transaction price, represented by the trading fee, is calculated based on volume and may vary depending on payment type and the value of the transaction. The transaction fee is collected from the customer at the time the transaction is executed. In certain instances, the transaction fee can be collected in crypto assets, with revenue measured based on the amount of crypto assets received and the fair value of the crypto assets at the time of the transaction. For the year ended December 31, 2022, we collected approximately 15% of total revenue in crypto assets. We currently do not have any formal policies requiring conversion of these crypto assets received into fiat currency.

The transaction price includes estimates for reductions in revenue from transaction fee reversals that may not be recovered from customers. Such reversals occur when the customer disputes a transaction processed on their credit card or their bank account for a variety of reasons and seeks to have the charge reversed after we have processed the transaction.

These amounts are estimated based upon the most likely amount of consideration to which we will be entitled. All estimates are based on historical experience and our best judgment at the time to the extent it is probable that a significant reversal of revenue previously recognized will not occur and, as a result, are subject to uncertainty. Consideration subject to reversal has not been significant. Additionally, there have not been material changes in these estimates or assumptions pertaining to reversals of revenue over the reporting periods presented. In the future, if there are material changes in the underlying estimates and assumptions pertaining to reversals of revenue, the financial statements could be materially impacted. All estimates of variable consideration are reassessed periodically.

The total transaction price is allocated to the single performance obligation. While we recognize transaction fee reversals due to transaction reversals as a reduction of net revenue, crypto asset losses due to transaction reversals are included in transaction expense.

Business combinations, Goodwill and Intangible

Assets—We determined that business combinations, goodwill and intangible assets is a critical accounting policy because such policies involve significant judgment, estimates and assumptions and to the extent that our estimates and assumptions with respect to these critical accounting policies materially change or if actual circumstances differ from those in the assumptions, our financial statements could be materially impacted. We account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to non-crypto intangible assets. These intangible assets do not have observable prices. We and have generally applied a cost approach in estimating the fair values of acquired intangible assets, withprimarily consisted of customer relationships, developed technology, trademarks and trade names, and non-compete agreements, which are recorded at acquisition date fair value, less accumulated amortization. These estimates and assumptions can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, the number of working hours required to recreate the intangible asset being a significant input to the estimate(if following the cost approach), and the estimated useful lives. Changes in these assumptions could affect the carrying value of these assets. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates.

We perform an impairment test annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying value of goodwill might not be fully recoverable. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test. Alternatively, a company may elect to proceed directly to a quantitative goodwill impairment test. For the qualitative assessments, we reviewed factors including macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, changes in any key personnel, any changes in composition of carrying amount of our assets and changes in our stock price. There were no reasonable changes to the methods and assumptions that would have resulted in an impairment. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted. For each year end, we determined that it was more likely than not that the fair value of each of our reporting units was more than the respective related carrying amounts, including goodwill, and therefore did not record any goodwill impairment.

Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets assessed as having indefinite lives are not amortized, but are assessed for indicators that the useful life is no longer indefinite or for indicators of impairment each period. Indicators we review, as applicable, include whether there has been a significant adverse change in the extent or manner in which our assets are being used, a significant adverse change in legal factors affecting our assets, customer attrition and/or a cash flow loss. Each period, we evaluate the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. We did not identify indicators of impairment for the years ended December 31, 2022 or 2021. In the future if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.

We completed two and six business acquisitions in 2022 and 2021, respectively, and as a result recorded $68.4 million and $94.5 million in intangible assets and $450.0 million and $546.7 million of goodwill using the aforementioned valuation estimates, respectively. There were no material changes to prior estimates for the years ended December 31, 2022 and 2021.

Valuation of privately-held strategic investments—We hold strategic investments in privately-held companies in the form of equity securities without readily determinable fair values in which we do not have a controlling interest or significant influence. These investments are accounted for under the measurement alternative method (“the measurement alternative”) and are measured at cost, less impairment, subject to upward and downward adjustments resulting from observable price changes for identical or similar investments of the same issuer. These adjustments require quantitative assessments of the fair value of our securities, which may require the use of unobservable inputs. Pricing adjustments are determined by using various valuation methodologies and involve the use of estimates using the best information available, which may include cash flow projections or other available market data. We determined that valuation of privately-held strategic investments is a critical accounting policy because such policy involves significant judgment, estimates and assumptions and to the extent that our estimates and assumptions with respect to this critical accounting policy changes or if actual circumstances differ from those in the assumptions, the financial statements could be materially impacted. For more information regarding these risks, see the section titled “Item 7A. Quantitative and Qualitative Disclosures about Market Risk–Equity investment risk.”

Privately-held strategic investments are evaluated quarterly for impairment. Our qualitative analysis includes a review of operating results, credit rating, asset quality and business prospects of the investees, changes in the regulatory and macroeconomic environment, and general market conditions of the geographical area or industry in which our investees operate. If indicators of impairment exist, we prepare quantitative measurements of the fair value of our equity investments using a market approach or an income approach, which requires judgment and the use of unobservable inputs, including discount rates, investee revenues and costs, and comparable market data of private and public companies, among others. When the quantitative remeasurements of fair value indicate an impairment exists, we write down the investment to its current fair value.

During the year ended December 31, 2022, we recognized impairment expense of $101.4 million related to our strategic investments in privately-held companies. We anticipate volatility to our net income (loss) in future periods due to changes in the fair values associated with these investments and changes in observable prices and similar transactions that could impact our fair value assessments. Based on future market conditions, these changes could be material to our financial statements.

Income taxes—We determined that income taxes is a critical accounting policy because such policy involves significant judgment, estimates and assumptions and to the extent that our estimates and assumptions with respect to this critical accounting policy changes or if actual circumstances differ from those in the assumptions, our financial statements could be materially impacted.

We utilize the asset and liability method for computing our income tax provision. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates. Management makes estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. Valuation allowances are based on management’s judgment and currently assessed based on scheduling the reversal of temporary differences, without consideration to future projections of income, given our history of losses and, as a result, are subject to uncertainty. If we were to be income generating in the future, our current approach may change and we would may be required to use estimates or assumptions of future taxable income in assessing the need for and quantum of valuation allowances. We recorded an additional

$252.3 million and $54.4 million in valuation allowance on our deferred tax assets in 2022 and 2021, respectively, using the aforementioned approach.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized within provision for income taxes.

We recorded $124.1 million and $111.0 million in unrecognized tax benefits for the years ended December 31, 2022 and 2021, respectively.

For U.S. federal tax purposes, crypto asset transactions are treated on the same tax principles as property transactions. We recognize a gain or loss when crypto assets are exchanged for other property, in the amount of the difference between the fair market value of the property received and the tax basis of the exchanged crypto assets. Receipts of crypto assets in exchange for goods or services are included in taxable income at the fair market value on the date of receipt.”

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You identify interest rate risk, foreign currency risk, market volatility and other risks associate with derivatives, equity investment risk, and the market price of crypto assets as market risk that could impact future financial operating results.

Rest of the question

The quantitative information you have disclosed in your sensitivity analysis from these market risk exposures does not capture the impact or align with your historical results. Instruction 3(A) under paragraph 305(a)(1)(ii) to the "Instructions to paragraph 305(a)" of Item 305 of Regulation S-K states that registrants should select hypothetical changes in market rates and prices that are expected to reflect reasonably possible near-term changes in those rates and prices. Please enhance your disclosures to address the following: • Tell us how your hypothetical 100 basis point increase or decrease in interest rates at December 31, 2022, would have had a $191.3 million increase or decrease in total revenue. • Tell us how your disclosure expresses the potential loss (or gain) in future earnings, fair values or cash flows as stipulated in paragraph (A) of the guidance referenced above. • Tell us your consideration for providing average, high, and low sensitivity analysis amounts over multiple periods as indicated in Instructions 1A and 1B to Item 305(a) of Regulation S-K. • Tell us whether you believe the 100 basis point increase or decrease in interest rates is reasonably possible in the near-term as stipulated in Instruction 3A to Item 305(a) of Regulation S-K, specifically explaining whether you believe a decrease in interest rates is reasonably possible given the current levels of inflation and actions taken by the Federal Reserve Board. Provide us with your proposed disclosures.

to the Staff’s comment, the Company advises the Staff that it will update its quantitative and qualitative disclosures about market risk in future filings with the Commission. The Company further advises the Staff that Instruction 1A to Item 305(a) notes that issuers “may” report average, high, and low sensitivity analysis as an alternative to reporting year-end amounts.

Rest of the answer

The Company has determined to report year-end amounts because such disclosure is consistent with the filings of a number of other peer financial

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GLOBAL, INC.

services companies and financial institutions surveyed by the Company, which similarly report year-end amounts. As a result, the Company believes that such presentation is more useful for investors. Below is an example of how the Company intends to further enhance the disclosure in future filings with the Commission beginning with the Form 10-Q for the quarter ended September 30, 2023, using the identified disclosure from the Form 10-K (new text in blue, deletions in red, moved text in green):

“Interest rate risk

We hadOur exposure to changes in interest rates primarily relates to interest earned on our cash and cash equivalents, including restricted cash and customer custodial funds, of $9.5 billion and $17.8 billion as of December 31, 2022 and 2021, respectivelycash and from our revenue sharing arrangement with the issuer of USDC.

Our investment policy and strategy related to our cash and cash equivalents and customer custodial cash funds is to preserve capital and meet liquidity requirements without increasing risk. Our cash and cash equivalents primarily consist of money market funds denominated in U.S. dollars and cash deposits, and therefore the fair value of our cash, cash equivalents, and customer custodial funds would not be significantly affected by either an increase or a decrease in interest rates. A hypothetical 100 basis points increase or decrease in average interest rates applied to our daily balances held as of December 31, 2022 and 2021, respectively, would have resulted in a $54.1 million and $54.5 million increase or decrease, respectively, in interest earned on cash, cash equivalents, and customer custodial funds. The Federal Reserve has increased the Federal Funds Rate over 400 basis points in 2022 to control current levels of inflation and as of December 31, 2022, the Federal Funds Rate was

4.33%. As a result of these significant recent increases in interest rates, a decrease in interest rates is possible. A hypothetical 500 basis points increase or decrease in average interest rates applied to our daily balances held as of

December 31, 2022 and December 31, 2021, which hypothetical basis point increase corresponds closely to the increase of the Federal Funds Rate since early 2022, would have resulted in a $270.6 million and $272.6 million increase or decrease in interest earned on cash, cash equivalents, and customer custodial funds.

We also earn interest income from a revenue agreement we holdsharing arrangement with the issuer of USDC.

Changes in interest rates would primarily impact interest income dueInterest income is earned on the underlying USDC reserves, to which the relatively short-term nature of our investments. A hypothetical 100 basis points increase or decrease in interest ratesissuer of USDC reported that, as of December 31, 2022, underlying reserves were held in cash and short-duration U.S. Treasuries, and therefore the fair value of these balances would not be significantly affected by either an increase or a decrease in interest rates. Under this arrangement, we share interest income earned pro rata based on the amount of USDC held on each respective party’s platform, and from the distribution and usage of USDC. Income derived by us from this arrangement is dependent on various factors including the balance of USDC on our platform, the total market capitalization of USDC, the investment policy of the issuer of USDC and the prevailing interest rate environment. A hypothetical 100 basis points increase or decrease in average interest rates applied to daily USDC reserve balances held would have resulted in a $191.3 million and $128.1 million73.6 million and $137.1 million increase or decrease in total revenue earned from our revenue sharing arrangement with the issuer of USDC for the years ended December 31, 2022 and 2021, respectively. A hypothetical 500 basis points increase or decrease in average interest rates applied to daily USDC reserve balances held, which hypothetical basis point increase corresponds closely to the increase of the Federal Funds Rate since early 2022, would have resulted in a $685.7 million and $367.8 million increase or decrease in revenue earned from our revenue sharing arrangement with the issuer of USDC for the years ended December 31, 2022 and 2021, respectively.

Foreign currency risk

Foreign currency transaction risk

Revenues, expenses, and financial results of our foreign subsidiaries are recorded in the functional currency of these subsidiaries. Our foreign currency exposure is primarily related to transactions denominated in Euros and British Pounds attributable to cash and cash equivalents, customer custodial funds and customer custodial cash liabilities and other intercompany transactions where the transaction currency is different from a subsidiary’s functional currency. Changes in foreign exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our results of operations as expressed in U.S. dollars. We have experienced and will continue to experience fluctuations in our results of operations as a result of gains or losses on the settlement and the remeasurement of monetary assets and liabilities denominated in foreign currencies that are not the functional currency.

We recognized realized and unrealized foreign currency losses of

$102.7 million for the year ended December 31, 2022, compared to net realized and unrealized foreign currency losses of $41.0 million recognized for the year ended December 31, 2021 in other expense (income), net in the consolidated statements of operations. If an adverse 10% foreign currency exchange rate change was applied to total monetary assets, liabilities, and commitments denominated in currencies other than the functional currencies at the balance sheet date, it would have resulted in an adverse effect on income before income taxes of approximately $10.3 million and

$4.1 million as of December 31, 2022 and 2021, respectively, after consideration of the effect of foreign exchange contracts in place for the years ended December 31, 2022 and 2021.

In the third quarter of 2022, we entered into foreign exchange forward contracts to hedge our exposure to foreign currency exchange rate risk on assets and liabilities denominated in currencies other than the functional currency. All of our forward contracts were closed out during the fourth quarter of 2022, and as of December 31, 2022, we do not have any open contracts for foreign exchange forwards. The losses on these forward contracts were recognized in other expense (income), net in the consolidated statements of operations.

From time to time, we may enter into derivatives or other financial instruments in an attempt to hedge our exposure to foreign currency exchange risk. It is difficult to predict the impact hedging activities would have on our results of operations. Additionally, the volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Our international operations increase our exposure to exchange rate fluctuations and, as a result, such fluctuations could have a material impact on our future results of operations and cash flows.

Foreign currency translation risk

Fluctuations in functional currencies from our net investment in international subsidiaries expose us to foreign currency translation risk, where changes in foreign currency exchange rates may adversely affect our results of operations upon translation into U.S. dollars. We recognized losses on translation adjustments, net of tax, of $35.2 million for the year ended December 31, 2022, compared to losses on translation adjustments, net of tax, of $9.7 million for the year ended December 31, 2021, in the consolidated statements of comprehensive (loss) income. As of December 31, 2022 and 2021, a 10% increase or decrease in foreign currency exchange rates would not have a material impact on our financial results.

Market volatility and other risks associated with derivatives

We have exposure to derivatives and related hedges measured at fair value. Market risk on derivatives is the exposure created by potential fluctuations in market prices and other factors and is a function of the type of derivative product, the volume of transactions, the tenor and terms of the agreement and the underlying volatility.

As of December 31, 2022, we had embedded derivative assets of $2.3 million and embedded derivative liabilities of

$2.3 million as a result of entering into transactions to borrow crypto assets, which are recorded on the consolidated balance sheets. We also had an embedded derivative asset of $1.3 million, as well as an embedded derivative liability of

$5.8 million for other payables denominated in crypto assets, and an embedded derivative asset of $0.3 million and an embedded derivative liability of $9.1 million for accounts and loans receivables that are denominated in crypto assets. These embedded derivative assets and liabilities are recorded on the consolidated balance sheets in accrued expenses and other current liabilities and accounts and loans receivable, net of allowance, respectively. As of December 31,

2022 and 2021, a 10% increase or decrease in the fair value of the derivative positions would not have a material impact on our financial results. For more information, see Notes 2. Summary of Significant Accounting Policies, 6. Accounts and Loans Receivable, Net of Allowance, 11. Prepaid Expenses and Other Assets, 12. Accrued Expenses and Other Current Liabilities, and 14. Derivatives, of the Notes to our consolidated financial statements included in Part

II, Item 8 of this Annual Report on Form 10-K.

Equity investment risk

We hold strategic investments in privately held companies in the form of equity securities without readily determinable fair values in which we do not have a controlling interest or significant influence. These investments are subject to a wide variety of market and price-related risks due to the lack of readily available market data, which requires us to make significant estimates and assumptions that could substantially impact the carrying value of the investments. We perform a qualitative assessment of our portfolio of strategic equity investments on a quarterly basis for indicators of impairment. Our analysis includes a review of operating results, credit rating, asset quality and business prospects of the investees, changes in the regulatory and macroeconomic environment, and general market conditions of the geographical area or industry in which our investees operate.

If indicators of impairment exist and the estimated fair value of an investment is below the carrying amount, we will write down the investment to fair value. As of December 31, 2022 and 2021, our strategic equity investments in privately held companies were $326.7 million and $364.0 million, respectively. We are required to record all adjustments to the fair value of our investments through our consolidated statements of operations under other expense (income), net. During the year ended December 31, 2022, we recognized impairment expense of $101.4 million related to our strategic investments in privately held companies.

During the year ended December 31, 2021, we recognized impairment expense of $329.2 million related to our strategic investments in privately held companies. We anticipate volatility to our net income (loss) in future periods due to changes in the fair values associated with these investments and changes in observable prices and similar transactions that could impact our fair value assessments. Based on future market conditions, these changes could be material to our financial results. For more information, see Note 11. Prepaid Expenses and Other Assets of the Notes to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Market price risk of crypto assets

We generate substantially all of our total revenue from transaction fees on our platform in connection with the purchase, sale, and trading of crypto assets by our customers. Transaction revenue is based on transaction fees that are either a flat fee or a percentage of the value of each transaction and may vary depending on payment type and the value of the transaction. We also generate total revenue from our

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COINBASE GLOBAL, INC.

subscription products and services and, while revenue from these products and services have not been significant to date, most of this revenue will also fluctuate based on the price of crypto assets. Accordingly, crypto asset price risk could adversely affect our operating results. In particular, our future profitability may depend upon the market price of Bitcoin and Ethereum, as well as other crypto assets. Crypto asset prices, along with our operating results, have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, Ethereum and other crypto assets has had and could in the future have an adverse effect on our earnings, the carrying value of our crypto assets, and our future cash flows. This may also affect our liquidity and our ability to meet our ongoing obligations.

We record impairment charges on our crypto assets held when crypto asset prices decrease below the carrying value of these crypto assets. As of December 31, 2022 and 2021, a 10% decrease in crypto asset prices would not have a material impact on our impairment charges. For more information, see Note 9. Goodwill, Intangible Assets, Net, and Crypto Assets Held of the Notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.”

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We note from your balance sheet presentation and line item description of Customer crypto assets and Customer crypto liabilities and footnote 1 that these accounts relate to safeguarding assets and safeguarding liabilities, respectively.

Rest of the question

Please revise your line item descriptions on the face of the balance sheets to present "safeguarding assets" and "safeguarding liabilities" to reflect the nature and character of this liability and offsetting asset (e.g., the current descriptions may suggest that you have control).

to the Staff’s comment, the Company advises the Staff that it will update its line item descriptions on the face of the consolidated balance sheets and in the Notes to the consolidated financial statements to present “safeguarding assets” and “safeguarding liabilities” in its future filings with the Commission beginning with its condensed consolidated balance sheets in its Form 10-Q for the quarter ended September 30, 2023. Read in the reply ↗

We note that gross crypto asset impairment expense and related crypto gains and losses were significant to net loss for the periods ending June 30, 2023 and December 31, 2022. Please tell us how you determined that separate line items for these crypto activities were not required under Rule 5-03(b) of Regulation S-X.

to the Staff’s comment, the Company advises the Staff that it will present gross crypto impairment expense and related crypto gains and losses as a separate line in its consolidated statements of operations in future filings with the Commission beginning with its condensed consolidated statements of operations in its Form 10-Q for the quarter ended September 30, 2023. The Company further advises the Staff that it will continue to separately disclose gross crypto impairment expense in Note 9.

Rest of the answer

Goodwill, Intangible Assets, Net, and Crypto Assets Held, of the Notes to its consolidated financial statements.

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You disclose that you made a change in your presentation of customer custodial cash liabilities from operating activities, to present them as financing activities within its consolidated statements of cash flows. Please tell us your basis for this determination, including the authoritative guidance you considered.

The Company advises the Staff that it records customer custodial cash liabilities in connection with cash received from the Company’s customers to fund their fiat wallets to use at such customers’ discretion on the Company’s platform. The Company further advises the Staff that ASC Topic 230, Statement of Cash Flows (“ASC 230”), requires entities to explain the changes in cash controlled by an entity in the statement of cash flows. However, there is no specific guidance on the cash flow classification for reporting such changes of cash held for other parties.

Rest of the answer

Although the Company is aware there is diversity in practice across entities that hold cash on behalf of their customers, including other marketplaces and payment services entities with similar agency relationships, the Company believes that its holding of funds on behalf of customers in an agency relationship that must be refunded to that same party or a third party at the instruction of the customer, is analogous to proceeds received from “borrowings,” rather than for the provision of goods or services.

The Company notes that Ernst & Young LLP updated its interpretive guidance related to ASC 230 which indicates that cash inflows and cash outflows from cash and cash equivalents held on behalf of customers should be classified based on the nature of the underlying cash flows and that it is understood that the Staff believes these cash flows are most appropriately classified as financing activities; however, classification as operating activities may also be acceptable. Accordingly, in considering the nature of the underlying cash flows, the Company considers the “borrowings” outstanding until the Company delivers the funds to satisfy its obligations and such delivery is deemed a repayment of a borrowing. As a result, the Company believes that it is appropriate to present funds held for settlement in financing activities in the Company’s consolidated statements of cash flows.

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You disclose that you participate in networks with proof-of-stake consensus algorithms, through creating or validating blocks on the network using the staking validators that it controls, that you offer both your consumer and institutional customers the opportunity to earn rewards on their crypto assets held and related rewards received are recognized as blockchain rewards revenue and related rewards paid to users

Rest of the question

recognized as transaction expenses. Please tell us if you stake your crypto assets held and if so, how the rewards are recognized in your financial statements.

The Company advises the Staff that it stakes an immaterial portion of crypto assets held for investment. For the years ended December 31, 2022 and 2021, rewards from such activity represented approximately $0.8 million and $0.4 million, respectively. Read in the reply ↗

Please clarify for us the principal market or exchange you use to measure fair value of the various types of crypto assets that you hold or trade in.

The Company advises the Staff that the Coinbase Exchange is the principal market that the Company uses to measure the fair value of crypto assets the Company holds or trades in since approximately 82% of the crypto assets held by the Company as of December 31, 2022 were supported for trading on the Coinbase

Exchange. Pricing data on the Coinbase Exchange is monitored by the Company’s Trade Surveillance team through an automated alerting system. Any variances over established price and volume thresholds are investigated and resolved.

Rest of the answer

For crypto assets held or traded by the Company that are not supported on the Coinbase Exchange, the Company obtains pricing data from various third-party service providers.

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Please tell us the business purpose for holding crypto assets. Specifically provide whether they are held for sale in the ordinary course of business.

As disclosed on page 114 of the Form

10-K, the Company advises the Staff that it holds crypto assets as investments and for operating purposes. The Company views its crypto asset investments as long-term holdings and does not plan to engage in regular trading of such crypto assets. With respect to crypto assets held for operational purposes, periodically, as an accommodation to customers, the Company may fulfill customer transactions using its own crypto assets.

Rest of the answer

The Company fulfills customer accommodation transactions using its own crypto assets for orders that do not meet the minimum trade size for execution on its platform or to maintain customers’ trade execution and processing times during unanticipated system disruptions. For the year ended December 31, 2022, customer accommodations were immaterial to the financial statements, constituting only $0.6 million. Additionally, the Company periodically uses crypto assets to fulfill corporate expenses denominated in crypto assets, including miner fees, staking rewards, promotional and marketing expenses and other various expenses totaling $383.3 million for the year ended December 31, 2022. Crypto assets held are accounted for as intangible assets with indefinite useful lives and are not considered held for sale in the ordinary course of business.

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We note your disclosure that you operate as one operating segment and one reportable segment. Under long-lived assets on page 139 of Note 2, you disclose that you test goodwill for impairment at the reporting unit level. We also note your business prioritization efforts in your 2022 restructuring in Note 3, the significant acquisitions in Note 4, and your 2023 restructuring as a subsequent event in Note 22.

Rest of the question

Please tell us why you have only one operating and reporting segment and reference for us the authoritative literature you rely upon to support your disclosure. In your response, at a minimum, ensure that you address the following: • Tell us your reporting unit(s) you identified for goodwill impairment testing purposes. • Tell us whether your reporting unit(s) are consistent with the "business prioritization efforts" identified in your 2022 and 2023 restructuring and significant acquisition disclosures. If not, separately tell us your planned reporting units. • Tell us your consideration for expanding your one reportable segment given your new business prioritization strategy.

The Company advises the Staff that the Company concluded that it has one operating segment in accordance with ASC Topic 280, Segment Reporting, because its chief operating decision maker (“CODM”), the Company’s Chief Executive Officer, Mr. Brian Armstrong, assesses the Company’s financial performance and makes decisions with regard to resource allocation at the consolidated Company level, based on the Company’s consolidated financial results and functional area level data.

Rest of the answer

The Company applied the requirements set out in ASC 350-20-35-34 to 38 to determine whether any of the identified components would constitute a reporting unit and concluded that the reporting unit for goodwill impairment testing purposes is the entire set of entities forming Coinbase Global, Inc. The Company assessed the three criteria for operating segments in the following components: entities, business units and geographic locations. Entities constitute a business and have discrete financial information, but are not reviewed by the CODM or used for decision making purposes. Geographic locations constitute a business, and have discrete financial information but are not reviewed by the CODM. For purposes of the 2022 and 2023 restructurings and significant acquisitions, the business prioritization efforts focused on initiatives that would most likely advance the Company’s mission and strategy. In the future, the Company will continue to monitor how the CODM makes operating decisions and assesses the Company’s operating performance to determine reportable segments.

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You disclose that you earn income on fiat funds under a revenue sharing arrangement with the issuer of USDC, pursuant to which the Company shares any interest income generated from USDC reserves pro rata based on (i) the amount of USDC distributed by each respective party and (ii) the amount of USDC held on each respective party’s platform.

Rest of the question

• Tell us the recognized accounts related to this revenue sharing agreement for the periods presented. • Tell us the terms of the arrangement, including maximum exposure to loss, maximum fiat funding requirements, holding term requirements that would impact your ability to exchange and/or redeem for cash, collateral rights and obligations and if interest income earned is received in cash, USDC or crypto, including amounts received and/or outstanding for the periods presented. • Tell us how customers earn USDC rewards, uses of and if available to all customers. • Tell us what the impact of the underlying USDC market cap is on your ability to earn interest income.

The Company advises the Staff that income earned from the revenue sharing arrangement with the issuer of USDC for the year ended December 31, 2022 is recorded within subscription and services revenue as disclosed in Note 5. Revenue, of the Notes to the Company’s consolidated financial statements in the Form 10-K. With respect to this arrangement with the issuer of USDC, the Company shares interest income earned pro rata based on the amount of USDC held on each respective party’s platform, and from the distribution and usage of USDC after certain expenses.

Rest of the answer

Income derived by the Company from this arrangement is dependent on various factors including the balance of USDC on the Company’s platform, the total market capitalization of USDC, the investment policy of the issuer of USDC and the prevailing interest rate environment. For example, a decline in the underlying USDC market capitalization would result in the Company generating less interest income under the arrangement. Such a decline, however, could be offset by a rise in interest rates. The Company has disclosed as noted in the section of the Form 10-K titled “Item 7A. Quantitative and Qualitative Disclosures about Market Risk—Interest rate risk,” that a hypothetical 100 basis points increase or decrease in interest rates would have resulted in a $128.1 million and $191.3 million increase or decrease in total revenue for the years ended December 31, 2021 and 2022, respectively. There are no maximum fiat funding requirements, holding term requirements that would impact the Company’s ability, or the ability of a customer of the Company, to exchange or redeem USDC for cash, or collateral rights and obligations under the arrangement. Income under the arrangement is earned in U.S. dollars and paid with USDC by the issuer of USDC to settle outstanding amounts due to the Company. As noted in the Company’s user agreement, the Company is not the issuer of USDC, does not hold reserves for USDC, and has no obligation to repurchase USDC for U.S. dollars. The Company’s maximum exposure to loss is the amount of USDC it holds as a corporate asset, in the event that the issuer of USDC failed to redeem that USDC for U.S. dollars. For the year ended December 31, 2022, pursuant to this arrangement, the Company recorded $245.7 million in revenue and, as of

December 31, 2022, had $180.0 million of receivables outstanding, recorded within accounts receivable, net, all of which was paid in full as of June 30, 2023. The Company further advises the Staff that USDC rewards are only available to eligible consumer and institutional customers and not to all customers. In order to receive USDC rewards, customers must hold USDC on the Company’s platform, live in a supported jurisdiction and provide information sufficient to verify their identity. As long as the amount of USDC in a customer’s wallet is greater than or equal to the equivalent of one U.S. dollar, the customer is eligible to receive USDC rewards. Customers in the USDC rewards program accrue such rewards on a daily basis. At the end of each month, the Company distributes the amount of rewards earned by the customer for the month to the customer in the form of USDC, which can be used as the customer chooses.

Read in the reply ↗

For any revenue stream, other than those where you have disclosed you are the principal, please tell us if you use your own crypto at any point during the lifecycle of the transaction.

The Company advises that, in addition to the revenue streams where the Company has disclosed it is the principal, the Company uses its own crypto to offer trade finance (post trade settlement) to credit eligible customers. Trade finance receivables are included in Accounts and loans receivable, net of allowance, and revenue earned on these short term loans is immaterial. Read in the reply ↗

We note your disclosure on page 166 that for crypto asset loans receivables, you require borrowers to post collateral held on your platform, that you may have the right to use the collateral, and if you do have the right to use the collateral, or if the collateral is fiat, you record the collateral as an asset with a corresponding obligation to return collateral.

Rest of the question

Please address the following: • Tell us the collateral provisions of crypto asset loan receivables for the periods presented; and • Tell us the carrying value of crypto asset loan receivables for which you have the right to use the underlying collateral, the carrying value of the underlying collateral asset and corresponding obligation to return collateral including the related balance sheet accounts where the collateral asset and liability are recognized.

The Company advises the Staff that with respect to the Company’s bilateral loans, which are issued under a master loan agreement (“MLA”), each borrower (a “Borrower”) grants to the Company a continuing first priority security interest in, and a lien upon, the collateral (which the parties to the loan agree constitutes “financial assets” held in a “securities account” with a “securities intermediary” as defined in Article 8 of the Uniform Commercial Code) and the account in which the collateral is held, which attaches upon the transfer of the loaned assets to the Borrower.

Rest of the answer

The collateral is typically held in an account controlled by the Company, but the MLA also allows the collateral to be held in the Borrower’s Coinbase account (subject to account control provisions), and each Borrower is restricted from accessing or instructing upon the account(s) holding the collateral. The Company and the Borrower each agree to customary mark-to-market and margin requirements with respect to the loaned assets and collateral, and upon termination of the loan and return of the loaned assets to the Company, the collateral is returned to the Borrower. Upon specified events of default, the Company has the right to (i) sell any collateral in a commercially reasonable manner, (ii) freeze or otherwise suspend access to the collateral or accounts holding the collateral and (iii) set off claims and apply property held by the Company in respect of any loan under the MLA against obligations owing to it in respect of any other loan with the Borrower.

With respect to the Company’s trade finance/portfolio margining product, the Company uses customer assets held on its platform as collateral for amounts loaned. Customers are obligated to ensure at all times that the cash and digital assets held in their trading balance is no less than a specified margin requirement. The customer grants to the Company a continuing first priority security interest in, lien on, and right of setoff with respect to, their right, title, and interest in and to all assets held by them on the Company’s platform (including their trading balance and vault balance, and any other account maintained by or with a Coinbase entity). Upon specified events of default, the Company has the right to (i) instruct the transfer of assets from the customer’s trading balance or vault balance to the Company’s own accounts, (ii) sell the collateral in a commercially reasonable manner and (iii) freeze or otherwise block access (including withdrawals) to the collateral and/or the customer’s accounts.

The Company further advises the Staff that as of December 31, 2022, the carrying value of crypto asset loan receivables for which the

Company has the right to use the underlying collateral was $[*]. The carrying value of the underlying collateral assets and corresponding obligation to return collateral associated with these loans was $[*]. Of the total collateral received, $[*] was recognized in USDC and $[*] was recognized in cash and cash equivalents on the consolidated balance sheets. The corresponding obligation to return the collateral was recognized in accrued expenses and other current liabilities on the consolidated balance sheets.

Read in the reply ↗

You disclose that for institutional crypto asset loans where collateral is held by the borrower in its crypto asset wallet on your platform, that due to the collateral requirements, your process for collateral maintenance, and collateral held on platform, your credit exposure is significantly limited and no allowance against loans receivable was recorded.

Rest of the question

Please tell us how you address the risk of a customer absconding with the collateral upon default since the collateral is held in the borrowers' crypto asset wallet.

The Company advises the Staff that for institutional crypto loans where collateral is held by the borrower in its crypto asset wallet on the

Company’s platform, restrictions are placed on the wallet such that borrowers are not able to abscond with the collateral. Upon repayment and closure of the loan, restrictions on collateral are removed and borrowers regain full access to their crypto assets. The Company refers the Staff to the Company’s response to Comment 29 for additional details. Read in the reply ↗

We note that interest and other receivables increased from $85.2 million at December 31, 2021 to $223.4 million as of December 31, 2022. Please tell us what comprises the balance of interest and other receivables for the periods presented, including the underlying terms and when you expect to collect these receivables.

The Company advises the Staff that interest and other receivables as of December 31, 2021 consisted of $33.9 million of receivables related to other subscription and services revenue, primarily denominated in crypto assets and due within 15 to 30 days of being invoiced,

$25.1 million of receivables due from various payment partners to settle customer transactions which are typically timing related and settle within 1 to 2 weeks of the transaction date, $10.0 million of receivables related to the

Company’s revenue sharing arrangement with the issuer of USDC, which was paid in full in

Rest of the answer

February, 2022 and $16.2 million of other miscellaneous receivables.

Interest and other receivables as of December 31, 2022 consisted of $180.0 million of receivables related to the Company’s revenue sharing arrangement with the issuer of USDC, all of which was paid in two installments in February and April, 2023. The remaining balance of $43.4 million consisted of $23.3 million of receivables due from various payment partners to settle customer transactions, all of which were fully paid as of March 31, 2023, $14.7 million of other receivables related to other subscription and services revenue, none of which were material individually or in the aggregate and $5.4 million of miscellaneous other receivables.

Note 9. Goodwill, Intangible Assets,

Read in the reply ↗

We note you disclosed that you did not record any goodwill impairment expense for the periods presented. Please tell us how you evaluated goodwill for impairment during 2022 including your consideration of the qualitative factors assessed under ASC 350-20-35-3C and if you performed Step 1 and /or Step 2 of the goodwill impairment test under ASC 350-20-35, please provide us the results of those tests in your response.

The Company advises the Staff that it completed its assessment of goodwill as of December 31, 2022 under ASC 350-20-35-3C and concluded that no indicators of impairment existed as of that date. As such, the Company did not perform Step 1 or

Step 2 of the goodwill impairment test under ASC 350-20-35.

In assessing the qualitative factors under ASC 350-20-35-3C, the Company considered macroeconomic conditions, the failure of several prominent crypto trading venues and lending platforms in 2022, cryptocurrency prices and trading volume trends, the competitive environment, regulatory

Rest of the answer

developments, the Company’s overall operating costs, the Company’s financial performance and other entity specific factors, including an analysis of the Company’s operations, senior leadership and the stock price performance of the Company’s Class A common stock on Nasdaq. Based on this assessment of qualitative factors, the Company concluded that the fair value of all reporting units significantly exceeded the carrying amount.

Supporting this conclusion, the Company additionally considered the following factors: the Company’s cost control measures, including the Company’s restructuring activities in 2022 and 2023, an analysis of projected operating cash burn which indicated the Company had sufficient cash runway for continued operations without a need to raise additional capital in 2023 through 2025 and the stock price performance of the Company’s Class A common stock on Nasdaq which indicated the Company’s market capitalization far exceeded the net asset value of the Company.

Read in the reply ↗

Please provide us the following that reconciles to the consolidated balance sheet, consolidated statements of operations, consolidated statements of cash flows, including supplemental non-cash activity, Other operating expense, net activity as disclosed on page 109, as well as in your liquidity and capital resources crypto assets disclosures on page 114: • Rollfowards for each and in total, of crypto assets held,

Rest of the question

crypto assets borrowed and accounts and loans receivable denominated in crypto assets. • Crypto assets pledged as collateral by you and distinguish between collateral where the lender has the right to use the collateral and the related collateral receivable and collateral where the lender does not have the right to use.

to the Staff’s comment, the Company has provided the requested rollforwards of crypto assets held, crypto assets borrowed, accounts and loans receivable denominated in crypto assets and crypto assets pledged as collateral below (in thousands). The lender has the right to use all crypto assets pledged as collateral presented in the table below.

Crypto assets held assets borrowed

Accounts receivable denominated in crypto

Loans pledged as collateral

Total

Beginning balance, 1/1/22

$

566,508

(1)

421,685

26,448

(2)(3)

—

1,014,641

Purchase of crypto assets

Rest of the answer

held

1,400,032

(5)

Disposal of crypto assets held

(969,185

)(5)

)

Crypto assets received as revenue

470,591

Crypto asset payments for expenses

(383,221

Crypto asset impairment expense

(757,257

Realized gain on crypto assets

36,666

Crypto assets borrowed

920,379

Crypto assets borrowed repaid with crypto assets

(1,432,688

Crypto assets pledged as collateral

(13,103

)(3)

13,103

(3)

Crypto asset loans originated

(91,538

)(8)

91,538

(8)

Payments of accounts payable denominated in crypto assets

(4,521

)(6)

Current year accounts receivable denominated in crypto, net

9,627

(6)

Receipts of accounts receivable denominated in crypto assets

9,890

(9,890

Gains (losses) on derivative instruments

(156

)(7)

250,311

(10)

(19,257

)(9)

(5,712

(2,360

222,826

Ending balance, 12/31/22

356,244

68,149

6,928

85,826

(2)

10,743

(4)

527,890

See Note 9. Goodwill, Intangible Assets, Net and Crypto Assets Held.

See Note 6. Accounts and Loans Receivable, Net of Allowance.

See Note 14. Derivatives.

See Note 11. Prepaid Expenses and Other Assets.

See Consolidated Statements of Cash Flows.

Included within changes in operating assets and liabilities on the Consolidated Statements of Cash Flows.

(7)

Represents loss on crypto asset investments hedged with crypto asset futures, a component of the

$13.0 million loss disclosed in Note 14. Derivatives.

Represents carrying amount of crypto assets borrowed at the time they were lent to third-party borrowers and derecognized.

(9)

Represents loss on accounts and loans receivable denominated in crypto assets, which sums to the

$25.0 million loss disclosed in Note 14. Derivatives.

Represents gain on crypto assets borrowed, related to loans currently outstanding as of December 31, 2022.

This is a component of the $359.5 million loss disclosed in Note 14. Derivatives.

Read in the reply ↗

You disclose that under the terms of your safeguarding obligation that you may be liable to your customers for losses arising from theft, other misuse including loss of private keys but that you have no reason to believe you will incur any expense associated with such potential liability because you have no known or historical experience of claims to use as a basis of measurement.

Rest of the question

Please address the following: • Tell us the terms under which you may be liable for losses, including how you define theft considering the various customer lawsuits alleging theft and fraud from their Coinbase accounts. • Confirm to us that you have not paid any customers for loses related to accounts held at Coinbase that are or would have been within the scope of SAB 121. Refer to footnote 9 of SAB 121.

The Company advises the Staff that none of the litigation or arbitration matters to which it is, or has been, party to relate to losses arising from theft or loss of private keys custodied by the Company. The Company’s active litigation and arbitration matters instead relate to the execution and settlement of crypto asset trades, fraudulent or unauthorized transactions, account takeovers, deposits and withdrawals of crypto assets, and failures or malfunctions of the Company’s systems and services.

Rest of the answer

While the Company may be liable to customers to the extent a customer were to suffer from a loss of assets on its platform due to theft or loss of private keys maintained by the Company, customers are solely responsible for the security of their emails, passwords, private keys, two-factor authentication codes, and devices. The

Company further advises the Staff that it has not paid any customers for losses related to accounts held at Coinbase that are or would have been within the scope of SAB 121.

Read in the reply ↗

We note that in connection with the issuance of the convertible notes in 2021, you entered into capped call agreements to reduce the potential dilution to holders of your common stock upon conversion of the convertible notes.

Rest of the question

Please address the following: • Provide us with a summary of the key terms of these agreements, including provisions that could cause adjustments to the initial strike and cap prices and any provisions that could affect your ability to choose net cash settlement or settlement in shares. Correspondingly address how your evaluation of these terms led you to determine that equity classification would be appropriate pursuant to ASC 815-40. • Tell us what will happen under the terms of the capped calls when notes are converted and if they reduce dilution to potential holders of your common stock.

The Company advises the Staff that on May 21, 2021, the Company issued

$1.25 billion aggregate principal amount of 0.50% convertible senior notes due 2026 (the “2026 Notes”) pursuant to an indenture, dated May 21, 2021 (the “Indenture”), between the Company and

U.S. Bank National Association, as trustee. The 2026 Notes were offered and sold pursuant to a purchase agreement (the “Purchase Agreement”) between the Company and J.P.

Rest of the answer

Morgan Securities LLC and Goldman Sachs & Co.

LLC, as representatives of the several initial purchasers (the “Initial Purchasers”), in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

Under the Purchase Agreement, the Company granted the Initial Purchasers of the 2026 Notes an overallotment option that allowed them to purchase up to an additional $187.5 million aggregate principal amount of the 2026 Notes solely to cover overallotments within a 30-day period from the date of the Purchase Agreement. The Initial

Purchasers exercised the overallotment option in full on May 26, 2021, resulting in the issuance of an additional $187.5 million in principal amount of 2026 Notes.

The 2026 Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.50% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The 2026 Notes mature on June 1, 2026, unless earlier converted, redeemed or repurchased. The net proceeds from the offering of the 2026 Notes were approximately $1.406 billion, after deducting the Initial Purchasers’ discounts and commissions and other debt issuance costs.

The initial conversion rate for the 2026 Notes was 2.6994 shares of the Company’s Class A common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $370.45 per share of the Company’s Class A common stock. The conversion rate or price is subject to adjustments under certain circumstances in accordance with the terms of the Indenture.

Capped Calls

On May 18, 2021, in connection with the issuance of the 2026 Notes, the Company entered into privately negotiated capped call transactions

(the “Base Capped Call”) with certain of the Initial Purchasers or their respective affiliates (the “option counterparties”) at a cost of approximately $78.375 million and pursuant to the capped call confirmations (the “Base Confirmations”). The Capped Call (as defined below) covers, subject to anti-dilution adjustments, the number of shares of the Company’s Class A common stock underlying the 2026 Notes sold in the offering. Because the Initial Purchasers exercised the overallotment option, the Company entered into additional capped call transactions (the “Additional Capped Call” and, together with the Base Capped Call, the

“Capped Call”) pursuant to capped call confirmations on May 26, 2021 (the “Additional Confirmations” and, together with the Base Confirmations, the “Confirmations”) related to the additional $187.5 million in principal amount of 2026 Notes issued upon exercise of the overallotment option. The Company paid $90.1 million to purchase the Capped Calls, $78.4 million of which was paid to purchase the Base

Capped Call, and the remaining $11.7 million for the Additional Capped Call. By entering into the Capped Call, the Company expects to reduce the potential dilution to its Class A common stock (or, in the event a conversion of the 2026

Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2026 Notes its Class A common stock price exceeds the conversion price of the 2026 Notes, with such reduction and/or offset subject to a cap based on the cap price. The strike price of the Capped Call was initially $370.4527 per share, with a cap price of approximately $478.00 per share.

While the capped call transactions were entered into in connection with the 2026 Notes, the Company considered ASC 480-10-20 to determine if the Capped Call meets the definition of freestanding financial instruments. Freestanding instruments should first be separately analyzed and accounted for, and then evaluated to determine whether embedded features within those instruments should be bifurcated or accounted for separately. ASC 480-10-20, Distinguishing Liabilities from Equity—Overall—Glossary, defines a freestanding financial instrument as a financial instrument that is entered into (1) separately and apart from any of the entity’s other financial instruments or equity transactions or (2) in conjunction with some other transaction and is legally detachable and separately exercisable.

The determination of whether an instrument is freestanding from or embedded in another instrument involves understanding both the form and substance of the transaction and may involve substantial judgment. The Capped Call was entered into with the following counterparties:

Citibank, N.A. (“CB”)

Goldman Sachs & Co. LLC (“GS”)

Bank of America, N.A. (“BOA”)

Bank of Montreal (“BOM”)

JPMorgan Chase Bank, National Association (“JPM”)

Mizuho Markets Americas LLC (“MM”)

The Company notes that the exercise of the Capped Call does not automatically result in the redemption of the 2026 Notes. Therefore, the

Company concluded that the Capped Call is considered separately exercisable from the 2026 Notes. In addition, Section 8(f) of the Confirmations specifically grants the counterparties of the Capped Call the rights to transfer or assign their rights to third parties subject to reasonable conditions. As stated in Section 8(f) of the Confirmations, the Capped Call holders can transfer the Capped Call to third parties without impacting the 2026 Notes subject to certain terms and conditions. Therefore, the Company concluded that the 2026 Notes and the Capped Call are legally detachable. As the 2026 Notes and Capped Call are legally detachable and separately exercisable, the Company determined that the 2026 Notes and Capped

Call meet the definition of freestanding financial instruments pursuant to ASC 480-10-20.

Despite the Capped Call being initially evaluated as freestanding financial instruments, further evaluation is required pursuant to ASC 815-10-15-9 to determine whether combination of the freestanding financial instruments is required. ASC

815-10-15-9 states that two or more freestanding financial instruments should be viewed as a single unit (and not accounted for separately) based on certain indicators:

The transactions were entered into contemporaneously and in contemplation of one another.

The transactions were executed with the same counterparty (or structured through an intermediary).

The transactions relate to the same risk.

There is no apparent economic need or substantive business purpose for structuring the transactions separately that could not also have been accomplished in a single transaction.

The Company evaluated these indicators to determine whether the 2026 Notes should be considered with the Capped Call as one unit of account as follows:

The 2026 Notes and the Capped Call were entered into in contemplation of one another.

The 2026 Notes and the Capped Call do not have the same counterparties. The 2026 Notes were issued ultimately to a much larger group of investors while CB, GS, BOA, BOM, JPM, and MM are the only counterparties to the Capped Call.

The 2026 Notes and the Capped Call do not relate to the same risk. The 2026 Notes contain both interest/credit and equity risks, but the Capped Call has only the equity risk of the Company.

There is a substantive business reason to have the 2026 Notes and the Capped Call executed separately.

Convertible debt investors usually prefer a lower conversion price while issuers prefer a higher conversion price. The Capped Call economically transforms a lower conversion price convertible debt to a higher conversion price convertible debt. A capped call is a call option purchased by the Company with a strike price equal to the conversion price, but the settlement price is capped at an amount equal to what would be the strike price of the separate high strike call option. This mirrors the economics of the two separate instruments similar to a bond hedge transaction.

Based on these considerations, the

Company concluded that the Capped Call should not be combined with the 2026 Notes pursuant to ASC 815-10-15-9.

In addition, the Additional Capped Call was entered into after the Base Capped Call upon exercise of the overallotment option by the Initial

Purchasers. The Base Capped Call does not reference the Additional Capped Call. The Company entered into the Additional Capped Call as separate Confirmations only after the Initial Purchasers exercised the overallotment option. As such, the Base

Capped Call and the Additional Capped Call are also both freestanding financial instruments pursuant to ASC 480-10-20.

Accordingly, the Company concluded that the 2026 Notes, the Base Capped Call and the Additional Capped Call are freestanding financial instruments pursuant to ASC 480. The Company also concluded that no combination is required primarily based on the fact that there is a substantive business reason to have the 2026 Notes and the Base Capped Call and the Additional Capped Call executed separately and the 2026 Notes and the Base Capped Call and the Additional Capped Call do not relate to the same business purpose/risk.

As freestanding financial instruments, the 2026 Notes and Capped Call should first be evaluated pursuant to ASC 480 to determine if the instruments should be categorized as liabilities. ASC 480 addresses several specific categories of instruments that must be classified as liabilities. The following instruments are classified as liabilities pursuant to ASC 480-10:

Mandatorily redeemable financial instruments (ASC

480-10-25-4 through 25-7).

Company’s Analysis. Not applicable – ASC 480-10-25-4 through 25-7 only apply to financial instruments that are issued in the form of a share and are mandatorily redeemable. As the Capped Call are not shares, these paragraphs are not applicable.

Financial instruments, other than an outstanding share (e.g., an equity-linked option contract), that embody or are indexed to an obligation to repurchase an issuer’s own shares by transferring assets (ASC 480-10-25-8 to 25-13).

Company’s Analysis. No – The Capped Call is a call option held by the Company, and as such does not represent an obligation of the Company to repurchase its own shares.

Certain financial instruments that embody an obligation to issue a variable number of the issuer’s equity shares where the monetary value, at inception, is solely or predominantly based on (ASC 480-10-25-14):

A fixed monetary amount known at inception (e.g., an obligation to deliver shares with a fair value at settlement equal to $1,000),

Variations in something other than the fair value of the issuer’s shares (e.g., an obligation to deliver shares with a fair value at settlement equal to the value of one ounce of gold), or

Variations inversely related to the fair value of the issuer’s own shares (e.g., net-share settled written put options).

Company’s Analysis.

No – The Capped Call is a call option and does not represent an obligation of the Company to issue its shares.

Therefore, based on the above analysis, the Company concluded that the Capped Call does not qualify for liability classification under ASC 480. As the Capped Call is not an ASC 480 liability, the Company next considered whether the Capped Call meets the definition of a derivative pursuant to ASC 815. The Company determined that the Capped Call meets the definition of a derivative as follows:

It has an underlying security (i.e. the Company’s Class A common stock price).

The Capped Call has a notional amount: the number of underlying options/shares.

The net payment for the Capped Call is approximately $78.375 million or approximately 9.0% (i.e.

$78.375 million / (approximately 3.6 million shares x $239.002 per share)) of the nominal amount that otherwise would be required for investing in the underlying shares. Therefore, the

Capped Call requires an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors.

The Capped Call provides for net share settlement.

Because the Capped Call meets the definition of a derivative, the Company further evaluated whether it meets the requirements for the equity scope exception under ASC 815-10-15-74(a) below. This evaluation includes capitalized terms throughout, which are defined in the

Confirmations.

Based on the closing trading price of the Company’s Class A common stock on May 18, 2021.

Indexation Guidance

Pursuant to the indexation guidance in ASC 815-40, the Company evaluated the Capped Call’s contingent exercise provisions and settlement provisions to determine if they are indexed to the Company’s Class A common stock. An exercise contingency is a provision that entitles the entity to exercise an equity-linked financial instrument based on changes in an underlying security, including the occurrence or nonoccurrence of a specified event. An exercise contingency would not preclude an instrument from being considered indexed to an entity’s own stock provided that it is not based on (a) an observable market other than the market for the issuer’s stock, or (b) an observable index, other than an index calculated or measured solely by reference to the issuer’s own operations. Additionally, an instrument would be considered indexed to an entity’s own stock if its settlement amount will equal the difference between the fair value of a fixed number of the entity’s equity shares and a fixed monetary amount. Capitalized terms not otherwise defined in this section shall have the meanings ascribed to such terms in the Confirmations.

(a) Exercise contingency

Examples of contingent exercise provisions are those that could accelerate each party’s ability to exercise a right or extend exercisability in some manner.

The Capped Call is a European style call option subject to a cap. The Capped Call will be automatically exercised at the Expiration Time on the Expiration Date pursuant to the Automatic Exercise provisions of the Equity Definitions which provide for automatic exercise unless the holder elects otherwise. Upon certain Extraordinary Events, an

Announcement Event, Nationalization, Insolvency or Delisting Event or Additional Disruption Events, the Capped Call is contractually structured to terminate. Further, upon certain events, such as the Dealer’s inability to preserve and unwind a commercially reasonable hedge position related to the transaction, the Dealer has the right to extend the settlement period of the Capped Call.

The Capped Call also includes an early termination provision based on beneficial ownership positions of the counterparties. That is, if at any time the Section 16 Percentage3 of the Dealer exceeds the specified amount such that the Dealer would be required to report its holdings as a beneficial owner and the Dealer is unable, after commercially reasonable efforts, to effect a transfer or assignment of all or a portion of the Transaction such that an Excess Ownership Position no longer exists, the Dealer may early terminate a portion of the Capped Call in which case the Company can settle in cash or shares pursuant to the “Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events” section of the Confirmations.

An occurrence of these events may cause an immediate movement (up or down) in the price of shares underlying the equity-linked option contract. As a result, the Dealer would not be able to continuously adjust its hedge position in the underlying shares due to the discontinuous stock price change and therefore is provided the opportunity to terminate the transaction.

According to Section 16 of the Securities Exchange Act of 1934, as amended, anyone who is directly or indirectly a beneficial owner of more than 10% of any class of equity securities of an issuer, or any director or officer of the issuer of such a security, is required to file the statements required by Section 16 of the Securities Exchange Act of 1934, as amended, with with the SEC with respect to transactions in the securities of such issuer.

As these provisions all act as exercise contingencies pursuant to the definition, the Company concluded that they should be viewed as acceptable because these exercise contingencies are not based on an observable market or index unrelated to the Company.

(b) Settlement amount

Under the second criterion of the indexation guidance, settlement must be calculated as the difference between the fair value of the equity shares and a fixed monetary amount (e.g., strike price) or a fixed amount of another financial instrument such as issued debt. Any potential adjustments to the settlement amount must be based on variables that are inputs used in the pricing (fair value measurement) of a fixed-for-fixed forward or option on equity shares.

The settlement amounts for the Capped Call are determined based upon the difference between a strike price and a traded price of the

Company’s Class A common stock subject to a cap. The Confirmations include a number of situations and circumstances whereby the Dealer, acting as the Calculation Agent, shall or may make, in good faith, commercially reasonable adjustments to the terms to account for the economic effect of a particular transaction or upon the occurrence of certain unexpected events. These events or transactions invalidate implicit assumptions used in the pricing of a fixed for fixed equity option

(e.g., no dilutive events). In each case, the adjustment for the terms is consistent with the impact the event or transaction has on the Capped Calls, and would not result in settlement at a fixed monetary amount. For example, certain adjustment provisions in the Confirmations are designed to compensate the parties to the Capped Call, in response to the invalidation of an implicit assumption in a standard valuation model used to determine the fair value of a fixed-for-fixed forward or option on an entity’s equity shares, for changes in value that are not incorporated into a standard pricing model including Extraordinary

Events as defined in the Confirmations, Calculation Agent Adjustments upon Merger Event, Tender Offer, Additional Disruption Events (Change in Law, Failure to Deliver and Hedging Disruption) and Announcement Event, etc. All adjustments to the settlement amount of the Capped Call are calculated in a manner consistent with the discretion provided in the 2002 ISDA Equity Derivatives Definitions on a commercially reasonable basis.

When acting as the Calculation Agent, the Dealer is explicitly required to make such adjustments in a commercially reasonable manner and only if doing so would produce an appropriate result. As those events are considered disruptive market events that are unpredictable and unhedgeable, the Capped Call provides for adjustment in the event they do occur in order to maintain the fair value of the contract before and after the event. Pursuant to ASC 815-40-15-7E, these adjustments are considered acceptable under the second criterion and do not cause the Capped Call not to be considered indexed to the Company’s own stock price.

The Additional

Capped Call was entered into after the Base Capped Call upon exercise of the overallotment option by the Initial Purchasers. The Base Capped Call does not reference the Additional Capped Call, and the notional of the Base Capped Call was not adjusted upon entrance into the Additional Capped Call. The Company entered into the Additional Capped Call as separate Confirmations only after the Initial Purchasers exercised the overallotment option.

Based on the above analysis, the Company determined that the Capped Call meets the equity indexation guidance.

Equity Classification Guidance (including consideration of changes to this Guidance under ASU 2020-06)

CONFIDENTIAL TREATMENT REQUESTED BY COINBASE GLOBAL,

INC.

The second criterion to qualify for the exception under ASC 815-10-15-74(a) is that the instrument must qualify for classification within stockholders’ equity. ASC 815-40-25 also provides guidance on when classification within stockholders’ equity is appropriate. Accordingly, the Company continued to evaluate if the Capped Call meets the equity classification requirement under ASC 815-10-15-74(a).

Contracts requiring settlement in shares, or providing the issuer with a choice of net cash settlement or settlement in shares, are considered to be classified within stockholders’ equity. On the contrary, contracts requiring net cash settlement or giving the counterparty the option cannot be considered classified as stockholders’ equity and therefore would not qualify for the exception from derivative accounting.

The terms of the Capped Call provide for net share settlement as the default settlement method.

However, the Capped Call may settle in cash if the Company elects to settle conversion of the related 2026 Notes in cash or the Company elects cash settlement in connection with Early Termination or upon certain Extraordinary Events. The default settlement method for the Capped Call is net share settlement but the Company has an option (but not obligation) to choose cash settlement and therefore the contractual settlement terms of the Capped Call do not otherwise violate the equity classification guidance as the Company always has the choice as to the settlement method and the Company cannot be forced to cash settle the contract (except for circumstances in which holders of the underlying shares would receive cash, as discussed in ASC 815-40-25-8 through 25-9 and ASC 815-40-55-2 through 55-6).

ASC 815-40-25 outlines additional conditions necessary to classify an instrument as equity. The Company’s consideration of the requirements of ASC 815-40-25-7 through 25-30 and ASC 815-40-55-2 through 55-6 is as follows:

Guidance

The Company’s Analysis

Entity has sufficient authorized and unissued shares

This criterion is not applicable as the Company will receive, not deliver, shares.

Contract contains an explicit share limit

No required cash payments if entity fails to timely file

No cash payments by the Company are required. Therefore, this criterion is met.

No cash-settled top-off or make-whole provisions

There are no such provisions in the Capped Call. Therefore, this criterion is met.

Based on the analysis above, the Company concluded that the Capped Call qualifies for an exception to derivative accounting pursuant to ASC 815-10-15-74(a) to be classified in stockholders’ equity. Accordingly, the Capped Call should be classified within stockholders’ equity at fair value at issuance (i.e. premium paid). No subsequent measurement is required as long as the terms of the Capped Call continue to meet the equity scope exception.

Impact to Dilution upon Conversion of the 2026 Notes

The Capped Call are separately negotiated transactions with counterparties who were not necessarily holders of the 2026 Notes, are not a part of the terms of the 2026 Notes, do not affect the rights of the 2026 Notes, and will take effect regardless of whether the 2026 Notes are converted, so long as the components of the Capped Call are in-the-money on the expiration dates. The Capped Call allows the Company to purchase shares of its own stock at a specified strike price (which will generally be the same as the strike price of the conversion option in the 2026 Notes). Correspondingly, if the 2026 Notes are actually converted, then the number of shares to be issued would be effectively partially offset by the shares received under the Capped Call as their components are exercised, unless they were out-of-the-money and the 2026 Notes were also out-of-the-money but converted anyway. Therefore, the Capped Call will reduce the potential dilution to holders of the Company’s Class A common stock after a conversion of the 2026 Notes.

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You disclose that if the lender has the right to use the collateral or if the collateral is fiat, you present the collateral pledged as a right to receive the collateral which is recognized in prepaid expenses and other current assets. We note that the line-item caption in prepaids only states assets pledged as collateral with no reference to a right to receive the collateral.

Rest of the question

Please tell us the location on the balance sheet of the assets pledged as collateral that the lender has the right to use.

The Company advises the Staff that although not noted in the line-item caption, the right to receive collateral is presented within prepaid expenses and other current assets on the balance sheet. The Company will update the line-item caption to state this in future filings with the Commission beginning with its Form 10-Q for the quarter ended

September 30, 2023. Read in the reply ↗

We note your disclosure on page 50, that in June 2023, you were issued notices, show- cause orders, and cease-and-desist letters, and became the subject of various legal actions initiated by U.S. state securities regulators in the states of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin alleging violations of state securities laws with respect to

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staking services provided by Coinbase, Inc. and that in July 2023, you entered into agreements with state securities regulators in California, New Jersey, South Carolina and Wisconsin, pursuant to which customers in those states will no longer be able to stake new funds, in each case pending final adjudication of the matters. You also disclose that an adverse resolution could have a material impact on your business and financial statements. Please tell us the staking revenues and related transaction expenses for the periods presented.

The Company advises the Staff that for the three and six months ended June 30, 2023, the

Company’s staking revenues related to customers located in the states of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin were $[*] and $[*], respectively, and the Company’s related transaction expenses were $[*] and $[*], respectively. Read in the reply ↗

Please describe any material financing, liquidity, or other risks you face related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets you use as collateral or the value of your crypto assets used by others as collateral.

The Company directs the Staff to the risk factor titled “We provide secured loans to our customers, which exposes us to credit risks and may cause us to incur financial or reputational harm” on page 110 of the Form 10-Q and the last three sentences of the risk factor titled “We route orders through third-party trading venues in connection with our Coinbase Prime trading service.

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The loss or failure of any such trading venues may adversely affect our business” on page 111 of the Form 10-Q for disclosure regarding the risks related to the impact that the current crypto asset market disruption has had, directly or indirectly, on the value of the crypto assets the Company uses as collateral and the value of the Company’s crypto assets used by others as collateral.

The Company further notes that its activities with respect to loaning and borrowing fiat and crypto assets to-date are not currently one of the Company’s primary offerings. As of May 2023, the Company stopped issuing new fiat loans to consumers and existing consumer borrowers will have until November 2023 to pay back their loans. For existing fiat loans and crypto asset loans outstanding, for which, as noted in the Company’s Form 10-Q for the quarter ended June 30, 2023, there was an outstanding balance of $132.9 million and $37.7 million, respectively, as of June 30, 2023, due to the Company’s collateral requirements that the Company applies to such loans (which, as noted in the Company’s Form 10-Q for the quarter ended June 30, 2023, range from 130% to 250% of the fair value of the loan), the Company’s process for collateral maintenance, and collateral held on the platform, the Company’s credit exposure was significantly limited and no allowance, write-offs or recoveries were recorded against these loans. As of June 30, 2023 and December 31, 2022, there were no loans receivable past due. With respect to borrowing arrangements, the Company only had $154.0 million in crypto asset borrowing and $100.0 million in crypto assets and fiat pledged collateral as of December 31 2022, which each represented less than 0.2% of the Company’s total assets. Since December 31, 2022, crypto asset borrowings and crypto assets and fiat pledged as collateral have decreased. As of June 30, 2023, with respect to borrowing arrangements, the Company only had $147.9 million in crypto asset borrowing and $79.4 million in crypto assets and fiat pledged collateral, which each represented less than 0.2% of the Company’s total assets. The Company further notes that due to its limited loaning and borrowing activities, it does not face material financing or liquidity risks and believes it currently has minimal exposure to crypto asset market disruptions with respect to the value of the crypto assets the Company uses as collateral and the value of the Company’s crypto assets used by others as collateral.

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To the extent material, please describe any of the following risks due to disruptions in the crypto asset markets: • Risk from depreciation in your stock price; • Financing risk, including equity and debt financing; and • Risk of increased losses or impairments in your investments or other assets.

With respect to the risk from depreciation in the Company’s stock price due to disruption in the crypto asset markets, the Company directs the Staff to the third sentence and the ninth bullet point of the risk factor titled “The market price of our Class A common stock may be volatile, and could decline significantly and rapidly.

Rest of the answer

Market volatility may affect the value of an investment in our Class A common stock and could subject us to litigation” on page 144 of the Form 10-Q for disclosure regarding risks from depreciation in the market price of the

Company’s Class A common stock due to disruptions in the crypto asset markets. The Company will also include further disclosure beginning with its Form 10-Q for the quarter ended September 30,

2023 in the risk factor titled “Our total revenue is substantially dependent on the prices of crypto assets and volume of transactions conducted on our platform. If such price or volume declines, our business, operating results, and financial condition would be adversely affected” to indicate that, in addition to its business, operating results, and financial condition being adversely affected by the price of, or demand for, crypto assets, “the price of the Company’s

Class A common stock could decline”.

With respect to financing risk, including equity and debt financing, due to disruption in the crypto asset markets, the Company directs the Staff to the fourth, eleventh and twelfth sentences of the risk factor titled “We might require additional capital to support business growth, and this capital might not be available” on page 143 of the Form 10-Q for disclosure regarding financing risk, including debt and equity financing, due to disruptions in the crypto asset markets.

With respect to risks of increased losses or impairments in the Company’s investments or other assets due to disruptions in the crypto asset markets, the Company directs the Staff to the eighth, ninth and tenth sentences of the risk factor titled “We have historically had a highly active acquisition and investment strategy and, while we have been less active in acquisitions and investments due to current market conditions, we may from time to time make acquisitions and investments, which could require significant management attention, disrupt our business, result in dilution to our stockholders, and adversely affect our financial results” on page 112 of the Form 10-Q for disclosure regarding the risk of increased losses or impairments in the Company’s investments or other assets due to disruptions in the crypto asset markets. Additionally, beginning with its Form 10-Q for the quarter ended September 30, 2023, the Company will revise the disclosure in the ninth and tenth sentences of this risk factor to specifically reference disruptions in the crypto asset markets in order to supplement the existing references to broader adverse economic conditions. The Company further directs the Staff to the last four sentences of the first paragraph of the risk factor titled “The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected” on page 123 of the Form 10-Q for disclosure regarding the risk of increased losses or impairments in the Company’s investments or other assets due to disruptions in the crypto asset markets.

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We note your disclosure that you have entered into partnerships or joint ventures with third parties, such as the issuer of USDC, where you or your partners receive and hold customer funds, and that you routinely route customer orders to third-party exchanges or other trading venues by holding cash and other crypto assets with such third-party exchanges or other trading venues in order to effect customer orders.

Rest of the question

Please revise to describe the criteria you use in selecting these counterparties for transactions, and include a discussion of risks related to counterparty exposure.

to the Staff’s comments, the Company will revise its disclosure beginning with its Form 10-Q for the quarter ended September 30, 2023 in substantially the form as follows (new text in blue):

“We have in the past, and may in the future, enter into partnerships, collaborations, joint ventures, or strategic alliances with third parties.

Rest of the answer

If we are unsuccessful in establishing or maintaining strategic relationships with these third parties or if these third parties fail to deliver certain operational services, our business, operating results, and financial condition could be adversely affected.

We have in the past, and may in the future, enter into partnerships, collaborations, joint ventures, or strategic alliances with third parties in connection with the development, operation and enhancements to our platform and products and the provision of our services. For example, the issuer of USDC provides us with creation and redemption services for USDC, including the operational capabilities required for our USDC customer-facing services. If the issuer of USDC fails to provide certain operational services, our ability to maintain our current level of offerings and customer experience for USDC could be harmed and interest or confidence in USDC could be impacted. Identifying strategic relationships with third parties, and negotiating and documenting relationships with them may be time-consuming and complex and may distract management. Moreover, we may be delayed, or not be successful, in achieving the objectives that we anticipated as a result of such strategic relationships. In evaluating counterparties in connection with partnerships, collaborations, joint ventures or strategic alliances, we consider a wide range of economic, legal and regulatory criteria depending on the nature of such relationship, including the counterparties’ reputation, operating results and financial condition, operational ability to satisfy our and our customers’ needs in a timely manner, efficiency and reliability of systems, certifications costs to us or to our customers, and licensure and compliance status. Despite this evaluation, third parties may still not meet our or our customers’ needs which may adversely affect our ability to deliver products and services to customers, may adversely impact our business, operating results, and financial condition.

Counterparties to any strategic relationship may have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals, and may subject us to additional risks to the extent such third party becomes the subject of negative publicity, faces its own litigation or regulatory challenges, or faces other adverse circumstances. Conflicts may arise with our strategic partners, such as the interpretation of significant terms under any agreement, which may result in litigation or arbitration which would increase our expenses and divert the attention of our management. If we are unsuccessful in establishing or maintaining strategic relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our business, operating results, and financial condition could be adversely affected.”

The Company notes that it has a wide number of partnerships, collaborations and strategic alliances across different areas and that involve different risks. The Company further advises the Staff that it believes it has disclosed within its existing risk factors disclosure, where material, the risks from these relationships to the Company. For example, the Company directs the Staff to the risk factors titled “We provide secured loans to our customers, which exposes us to credit risks and may cause us to incur financial or reputational harm,” on page 39 of the Form 10-Q,

“Cyberattacks and security breaches of our platform, or those impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating results, and financial condition” on page 81 of the Form 10-Q, “We currently rely on third-party service providers for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our customers” on page 96 of the Form 10-Q, “Loss of a critical banking or insurance relationship could adversely impact our business, operating results, and financial condition” on page 97 of the Form

10-Q, “We route orders through third-party trading venues in connection with our Coinbase Prime trading service. The loss or failure of any such trading venues may adversely affect our business” on page 111 of the Form 10-Q, and the risks under the heading “Risks Related to Third Parties” beginning on page 131 of the Form 10-Q.

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We note your disclosure on page 16 of your Form 10-K for the fiscal year ended December 31, 2022 that "the [SEC]...[has] stated that certain digital assets or digital asset products may be classified as securities under U.S.

Rest of the question

federal and state laws - however, there has not been definitive guidance on this point." We also note your risk factor disclosure under this heading that "there is no certainty under the applicable legal test whether particular crypto assets, products or services are not securities." Please remove or revise these statements in light of the fact that the Commission has identified numerous crypto assets as securities, the legal tests are well-established by U.S. Supreme Court case law, and the Commission and staff have issued reports, orders and statements that provide guidance on when a crypto asset may be a security for purposes of the U.S. federal securities laws.

The Company directs the Staff to the Company’s response to Comment 42 below which addresses Comment 41 and Comment 42. Read in the reply ↗

We note the statements that the legal test for determining whether any given crypto asset, product or service is a security is a highly complex, fact-driven analysis that "evolves over time," that it is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff and that "it is difficult to predict the direction

Rest of the question

or timing of any continuing evolution" of the SEC’s views with regard to crypto. Please remove these statements as the legal tests are well-established by U.S. Supreme Court case law and the Commission and staff have issued reports, orders, and statements that provide guidance on when a crypto asset may be a security for purposes of the U.S. federal securities laws.

With respect to Comments 41 and 42, which address the Company’s risk factor disclosures related to whether particular crypto assets, products, or services could be considered “securities” under existing law, the Staff has identified five statements that the Staff requests that the Company remove or revise.

The Company notes that each of these five statements appear in the Form S-1 that the Commission declared effective on April 1, 2021 in connection with the Company’s direct public listing.

Rest of the answer

The Company further notes that, in reviewing the Company’s original draft Form S-1, the Staff requested that the Company revise its risk factor to “clarify that as to all other digital assets [other than Bitcoin and Ether] there is currently no certainty under the applicable legal test that such assets are not securities, notwithstanding the predictions of your scoring model.” In response to this comment, the Company revised the relevant risk factor in the Form S-1 to state: “With respect to all other crypto assets, there is currently no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset could be deemed a ‘security’ under applicable laws.” The Staff requested no further revisions to this disclosure at the time and in Comment 41, requests its deletion.

The Company advises the Staff that it continues to believe that the inclusion of these statements in its risk disclosures is important information for investors, and there has been no change in the relevant statutes or rules since these disclosures were first introduced. However, in response to the Staff’s comments, the Company will revise the Company’s disclosures substantially similar to the following beginning with its Form 10-Q for the quarter ended September 30, 2023, with respect to the updates to the risk factor disclosure, and beginning with its Form 10-K for the year ending December 31, 2023, with respect to the updates to the business section disclosure, to address the Staff’s comments:

Form 10-K Business Section (new text in blue, deletions in red, moved text in green):

“Securities

In recent years, the Securities and Exchange Commission (“SEC”) and U.S. state securities regulators have stated that certain digital assets or digital asset products may be classified as securities under U.S. federal and state securities laws, and in the case of the SEC, has made public statements on this topic - however, there hasthese statements are not beenbinding or definitive guidance on this point, and there is currently no certainty under the SEC’s application of the applicable legal test as to whether particular crypto assets, products or services would be deemed securities. Though the

SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given crypto asset is a security in April 2019, this framework is also not a rule, regulation or statement of the SEC and is not binding on the SEC. A number of enforcement actions and regulatory proceedings have since been initiated against digital assets and digital asset products and their developers and proponents, as well as against trading platforms that support digital assets. Several foreign governments have also issued similar warnings cautioning that digital assets may be deemed to be securities under the laws of their jurisdictions.

We have established policies and practices to evaluate each crypto asset we consider for listing or for custody and are a founding member of the Crypto Rating Council, a member-owned and operated organization whose purpose is to assess whether any given crypto assets, or whether the development, issuance, and use of such assets, have characteristics that make them more or less likely to implicate U.S. federal securities laws. We also evaluate all other products and services prior to launch under U.S. federal and applicable international securities laws.”

Form 10-Q Risk Factor (new text in blue, deletions in red, moved text in green):

“A particular crypto asset, product or service’s status as a

“security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset or product offering, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.

The SEC and its staff have taken the position that a range of crypto assets, products and services fall within the definition of a

“security” under the U.S. federal securities laws. Despite the SEC being the principal federal securities law regulator in the United States, whether or not an asset, product or service is a security or constitutes a securities offering under federal securities laws is ultimately determined by a federal court. The legal test for determining whether any given crypto asset, product or service is a security iswas set forth in the 1946 Supreme Court case SEC v. W. J. Howey Co. and requires a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict. Accordingly, whether any given crypto asset, product or service would be ultimately deemed to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed a “security” or “securities offering” under applicable laws. The SEC generally does not provide advance guidance or confirmation on its assessment of the status of any particular crypto asset, product or service as a security. Furthermore, the SEC’s views in this area have evolved over time, and, at times, have appeared contradictory, and it is difficult to predict the direction or timing of any continuing evolution. It is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views ofapproach to enforcement by the SEC and its staff.

Despite the The SEC being the principal federal securities law regulator in the United

States,’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether or not anany given crypto asset, product or service is a security or constitutes a securities offering under federalin April 2019. The SEC has also recently brought enforcement actions and entered into settlements with numerous cryptoeconomy participants alleging that certain digital assets are securities, including the June 2023 Complaint. These statements, framework and enforcement actions are not rules or regulations of the SEC and are not binding on the SEC. There is currently no certainty under the SEC’s application of the applicable legal test as to whether particular crypto assets, products or services are not securities laws is ultimately determined by a federal court.

Moreover, the SEC and the Commodities Futures Trading Commission (the “CFTC”) and their senior officials have, at times, taken conflicting positions in speeches and enforcement actions as to whether a particular crypto asset is a security or commodity. There is currently no certainty under the applicable legal test as to whether particular crypto assets, products or services are not securities, notwithstanding the conclusions we may draw based on our risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed a “security” or “securities offering” under applicable laws. Similarly, though the SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given crypto asset is a security in April 2019, this framework is also not a rule, regulation or statement of the SEC and is not binding on the SEC.

Several foreign jurisdictions have taken a broad-based approach to classifying crypto assets, products and services as

“securities,” while other foreign jurisdictions, such as Switzerland, Malta, and Singapore, have adopted a narrower approach. As a result, certain crypto assets, products or services may be deemed to be a “security” under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of crypto assets, products or services as “securities.”

The classification of a crypto asset, product or service as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, and clearing, as applicable, of such assets, products or services. For example, a crypto asset, product or service that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in crypto assets, products or services that are securities in the United

States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade crypto assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an ATS in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. Foreign jurisdictions may have similar licensing, registration, and qualification requirements.

We have policies and procedures to analyze whether each crypto asset that we seek to facilitate trading of on Coinbase Spot Market, as well as our products and services, could be deemed to be a “security” under applicable laws. Our policies and procedures do not constitute a legal standard, but rather represent our company-developed model, which we use to make a risk-based assessment regarding the likelihood that a particular crypto asset, product or service could be deemed a

“security” under applicable laws.

Because Coinbase Spot Market, Coinbase Prime and Coinbase app are not registered or licensed with the SEC or foreign authorities as a broker-dealer, national securities exchange, or ATS (or foreign equivalents), we only permit trading of those crypto assets, and offer products and services, for which we determine there are reasonably strong arguments to conclude that the crypto asset, product or service is not a security. We believe that our process reflects a comprehensive and thoughtful analysis and is reasonably designed to facilitate consistent application of available legal guidance on crypto assets, products and services and to facilitate informed risk-based business judgment. In addition, as we shared in our petition for SEC rulemaking, we remain open to registering or relying on an exemption to facilitate and offer the sale of crypto asset securities. We recognize that the application of securities laws to the specific facts and circumstances of crypto assets, products and services may be complex and subject to change, and that a listing determination does not guarantee any conclusion under the U.S. federal securities laws. Regardless of our conclusions, we have been, and could in the future be, subject to legal or regulatory action in the event the SEC or a state or foreign regulatory authority were to assert, or a court were to determine, that a supported crypto asset, product or service offered, sold, or traded on our platform or a product or service that we offer is a “security” under applicable laws. There can be no assurance that we will properly characterize over time any given crypto asset, product or service offering as a security or non-security, or that the SEC, foreign regulatory authority, or a court having final determinative authority on the topic, if the question was presented to it, would agree with our assessment. We expect our risk assessment policies and procedures to continuously evolve to take into account case law, legislative developments, facts, and developments in technology. In June 2023, the SEC filed the June 2023 SEC Complaint. We and Coinbase, Inc. subsequently filed an answer to the June 2023 SEC Complaint in June 2023. Additionally, in June 2023, we and Coinbase, Inc. became the subject of the State Staking Actions.

If an applicable regulatory authority or a court, in either case having final determinative authority on the topic, were to determine that a supported crypto asset, product or service currently offered, sold, or traded on our platform is a security, we would not be able to offer such crypto asset for trading, or product or service on our platform, until we are able to do so in a compliant manner. A determination by the SEC, a state or foreign regulatory authority, or a court that an asset that we currently support for trading on our platform, or product or service that we offer on our platform, constitutes a security may result in us removing that crypto asset from or ceasing to offer that product or service on our platform, and may also result in us determining that it is advisable to remove assets from our platform, or to cease offering products and services on our platform, that have similar characteristics to the asset, product or service that was alleged or determined to be a security. Alternatively, we may determine not to remove a particular crypto asset from Coinbase

Spot Market or to continue to offer a product or service on our platform even if the SEC or another regulator alleges that the crypto asset, product or service is a security, pending a final judicial determination as to that crypto asset, product or service’s proper characterization, and the fact that we waited for a final judicial determination would generally not preclude penalties or sanctions against us for our having previously made our platform available for trading that crypto asset or offering that product or service on our platform without registering as a national securities exchange or ATS or registering tokens that we may issue, such as our cbETH token or our staking services, with the SEC. As such, we could be subject to judicial or administrative sanctions for failing to offer or sell the crypto asset, product or service in compliance with the registration requirements, or for acting as a broker, dealer, or national securities exchange without appropriate registration, including in connection with the June 2023 SEC Complaint. Such an action could result in injunctions, cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm.

Customers that traded such supported crypto asset on our platform and suffered trading losses could also seek to rescind a transaction that we facilitated on the basis that it was conducted in violation of applicable law, which could subject us to significant liability. We may also be required to cease facilitating transactions in the supported crypto asset other than via our licensed subsidiaries, which could negatively impact our business, operating results, and financial condition. Additionally, the SEC has brought and may in the future bring enforcement actions against other cryptoeconomy participants and their product offerings and services that may cause us to modify or discontinue a product offering or service on our platform. If we were to modify or discontinue any product offering or service or remove any assets from trading on our platform for any reason, our decision may be unpopular with users, may reduce our ability to attract and retain customers

(especially if similar products, services or such assets continue to be offered or traded on unregulated exchanges, which includes many of our competitors), and may adversely affect our business, operating results, and financial condition.

Further, if Bitcoin, Ethereum, stablecoins or any other supported crypto asset is deemed to be a security under any U.S. federal, state, or foreign jurisdiction, or in a proceeding in a court of law or otherwise, it may have adverse consequences for such supported crypto asset. For instance, all transactions in such supported crypto asset would have to be registered with the SEC or other foreign authority, or conducted in accordance with an exemption from registration, which could severely limit its liquidity, usability and transactability. Moreover, the networks on which such supported crypto assets are utilized may be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. Further, it could draw negative publicity and a decline in the general acceptance of the crypto asset. Also, it may make it difficult for such supported crypto asset to be traded, cleared, and custodied as compared to other crypto assets that are not considered to be securities. Specifically, even if transactions in a crypto asset were registered with the SEC or conducted in accordance with an exemption from registration, the current intermediary-based framework for securities trading, clearance and settlement is not consistent with the operations of the crypto asset market. For example, under current SEC guidance, crypto asset securities cannot be held on behalf of customers by broker-dealers that also support custody of traditional securities; and the SEC has not permitted public permissionless blockchain-based clearance and settlement systems for securities.”

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We note your disclosure under this risk factor that you may issue cbETH tokens. Please revise to provide a materially complete description of the cbETH tokens, including without limitation their purpose, mechanics and utility.

to the Staff’s comment, the Company advises the Staff that cbETH is an Ethereum-based “wrapped staking token” that represents ownership of ETH staked through the Company’s platform. Eligible customers can obtain cbETH by wrapping their staked ETH. A cbETH holder can sell or transfer their cbETH within the Coinbase app or send cbETH to a self-custody wallet or to other addresses on the Ethereum blockchain. Selling or otherwise transferring cbETH automatically transfers ownership of the underlying staked ETH, along with any rewards earned.

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The Company further advises the Staff that the ETH staked and represented by cbETH is not currently material. As of June 30, 2023 and December 31, 2022, the percentage of staked ETH held on behalf of cbETH holders was less than [*]% and [*]% compared to the value of staked assets held on behalf of individual consumers staked through the Coinbase app, respectively. Moreover, for the six months ended June 30, 2023 and the year ended December 31, 2022, revenue generated from this product represented only [*]% and [*]% of the

Company’s total revenue, respectively. The Company will continue to evaluate its disclosure as it relates to cbETH in future filings with the Commission.

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Please revise to describe the terms and provisions of your insurance policies, including insurance policies covering the crypto assets that you hold on behalf of customers in wallets in your custody or with third-party custodians, including, the amount of coverage, term, termination provisions, renewal options and limitations on coverage.

The Company advises the Staff that it believes that it has highlighted to investors the material risks to the Company regarding its insurance policies, specifically that in certain instances the Company’s insurance may not or will not be sufficient to protect the Company against various losses that the Company or its customers may incur, including with respect to the crypto assets that the Company holds on behalf of customers in wallets in its custody or with third-party custodians.

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The Company directs the Staff to the following risk factors which cover these risks: “Cyberattacks and security breaches of our platform, or those impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating results, and financial condition” on page 81 of the Form

10-Q, “Our failure to safeguard and manage our and our customers’ fiat currencies and crypto assets could adversely impact our business, operating results, and financial condition” on page 99 of the Form 10-Q, “The theft, loss, or destruction of private keys required to access any crypto assets held in custody for our own account or for our customers may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any crypto assets, it could cause regulatory scrutiny, reputational harm, and other losses” on page 101 of the Form 10-Q, “We obtain and process a large amount of sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business” on page 126 of the Form 10-Q and “We may be adversely affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as terrorism, that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster” on page 142 of the Form

10-Q. Moreover, the Company highlights the risks associated with a loss of insurance carrier relationships in the risk factor on page 97 of the Form 10-Q: “Loss of a critical banking or insurance relationship could adversely impact our business, operating results, and financial condition.”

Company further notes that providing detailed disclosure regarding the terms of the Company’s insurance policies publicly could result in significant harm to the Company, its investors and its customers, would also result in competitive harm to the Company, and constitutes the type of information that companies customarily and actually treat as private and confidential. Disclosing the Company’s coverage limits and the other terms of its insurance policies may exacerbate security threats to the Company and its customers and provide actionable information to threat actors that could harm the Company, its investors and its customers. For example, a threat actor would likely use such information in a ransomware attack to determine the amount of ransom payment it would attempt to extract from the Company. In fact, in its recent adopting release regarding Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure, the Commission noted that, with respect to disclosure of material cybersecurity incidents, it was streamlining such disclosure requirements “to focus the disclosure primarily on the impacts of a material cybersecurity incident, rather than on requiring details regarding the incident itself” in order to address the concerns raised by commentators that such disclosures may empower “threat actors with actionable information that could harm a registrant and its investors.” As noted above, the Company believes that its existing disclosure appropriately balances providing investors with information regarding the material impacts of losses above covered amounts under its insurance policies while not providing specific details regarding the policies themselves, which would provide threat actors with actionable information that could harm the Company, its investors and its customers. Similarly, with respect to the Company’s directors and officers insurance policy, disclosure of such information could result in significant harm to the Company, its directors and officers, and its investors as it may result in plaintiffs’ firms and other litigants using that information to determine the amount of damages they would seek in a specific case from the Company and its officers and directors. Moreover, disclosing the detailed terms of the Company’s insurance would result in competitive harm. For example, customers may wrongfully assume that the Company’s insurance coverage is more limited than its competitors simply because the Company’s competitors do not provide comparable information regarding the amounts of coverage and other terms of insurance policies in their public disclosures. Furthermore, disclosure of detailed terms of these policies could impact the Company’s ability to negotiate terms favorable to the Company in connection with any future policies as current policy terms could be used by insurance providers as leverage in future negotiations. Finally, the detailed terms regarding the Company’s insurance policies is the type of information that companies, including the Company, treat as private and confidential and generally do not publicly disclose. The Company only provides such information to its board of directors, to employees on an as-need to know basis and to third-parties, on an as-need to know basis and that have confidentiality obligations to the Company. The Company surveyed the filings of a number of other reputable financial services companies and financial institutions, including American Express Company, Charles Schwab Corporation, Citigroup Inc., JPMorgan Chase & Co., Mastercard Incorporated, PayPal Holdings, Inc., SoFi Technologies, Inc., and Visa Inc. and notes that none of these companies provide detailed information regarding the terms of their insurance policies in their periodic filings with the Commission and almost all of which, similar to the Company, disclose that insurance coverage would not be sufficient to cover all losses.

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We note recent news articles discussing your suspension of trading of certain stablecoins in Canada. Please update your disclosure and describe any potential material adverse effect this suspension may have on your business, operating results, financial condition, or cash flows.

The Company advises the Staff that the impact of the delisting of USDT, RAI and DAI from the Company’s platform in Canada in August 2023 was immaterial to the Company’s business, operating results, financial condition and cash flows. For the year ended December 31, 2022 and the six months ended June 30, 2023, revenue derived from the trading of these stablecoins by

Canadian customers was $[*] and $[*], or [*]% and [*]% of the Company’s total revenue, respectively.

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In addition, the delisting of these stablecoins did not result in increased customer complaints or customer churn and the Company is not aware of any negative customer sentiment or adverse impact on the Company’s brand and reputation. In the event that the suspension of trading or delisting of certain crypto assets on the Company’s platform has a material adverse effect on the

Company’s business in the future, the Company will update its future filings with the Commission accordingly.

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We note here that you launched a beta of Coinbase NFT in April 2022. Please disclose its current functionality and revise to explain in further detail the following with respect to your NFT marketplace: • Your plans for future phases of the NFT marketplace, including a timeline and estimated costs associated with further developing the marketplace; • Whether you provide custody services for holders of NFTs; • How

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Coinbase NFT operates and specifically the services and activities provided, and how Coinbase NFT interacts with the blockchain; • The type of fee received (e.g. fiat or crypto) and how it is determined; and • Your process for approving NFTs for listing on your marketplace and what role you play in price discovery or other disclosure regarding the particular NFTs that are traded.

to the Staff’s comment, the

Company advises the Staff that the Coinbase NFT marketplace remains in beta release, there are currently a limited number of customers that utilize the marketplace, and the Company currently does not monetize, and therefore derives no revenue, from such marketplace. To the extent the Company further develops its NFT marketplace or revenue derived from the NFT marketplace becomes material in the future, the Company will update its applicable disclosures to provide the disclosure requested by the Staff. Read in the reply ↗

We note your disclosure that Coinbase engages in a number of activities around the lending and borrowing of crypto assets. We also note the closure of Coinbase Borrow in May 2023. Please update and expand your disclosure to provide a materially complete description of your lending and borrowing activities, including the sources of the crypto assets and the relevant terms of the arrangements.

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For example purposes only: • Clarify whether you originate only cash and crypto asset-collateralized loans or whether you also originate unsecured loans or loans secured by other assets, and if so, disclose any limits on the amount of loans that may be originated; • Quantify Coinbase’s loans; • Describe the purpose of the crypto asset loans you originate and your borrowings, including how the lent or borrowed crypto assets are used; • Disclose the arrangements for the use of customers’ crypto assets, including whether and to what extent they are compensated; • Further describe the limits you place on the amount of crypto assets lent and/or borrowed based on average daily volume depending on the loan-to-value of the loans and based on market events or catalysts; and • Please confirm whether your lending activities solely make use of crypto assets held by Coinbase, or whether customer crypto assets are also used in lending activities.

The Company advises the Staff that it has historically engaged in the following activities regarding lending and borrowing: (i) lending fiat to consumers and institutional customers; (ii) lending crypto assets to eligible institutional customers and (iii) borrowing fiat and crypto assets from eligible institutional customers. The Company further advises the Staff that, as noted in Note 6.

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Accounts and Loans Receivable, Net of Allowance to the notes to the condensed consolidated financial statements in the Form 10-Q for the quarter ended June 30, 2023, as of May 2023, the Company stopped lending new fiat to consumers and existing consumer borrowers will have until November 2023 to pay back their loans.

Moreover, the Company advises the Staff that its activities, to date, with respect to lending and borrowing crypto assets are not currently material and, accordingly, the Company does not intend to include detailed disclosure regarding such activities. For the year ended December 31, 2022, the Company only derived [*]% of its total revenue from these activities and as of December 31, 2022, the Company had issued loans with an outstanding balance of $184.0 million, comprising only 0.2% of the Company’s total assets, and the fair value of the Company’s crypto asset borrowings were $154.0 million, comprising less than 0.2% of the Company’s total assets. The Company will continue to evaluate its disclosure as it relates to the Company’s activities with respect to lending and borrowing crypto assets in future filings with the Commission to the extent such activities become material.

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We note that you own and/or hold crypto assets on behalf of third parties. To the extent material, please explain whether these crypto assets serve as collateral for any loan, margin, rehypothecation, or other similar activities to which you or your affiliates are a party.

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If so, identify and quantify the crypto assets used in these financing arrangements and disclose the nature of your relationship for loans with parties other than third parties. State whether there are any encumbrances on the collateral. Discuss whether the recent crypto asset market disruption has affected the value of the underlying collateral.

The Company advises the Staff that the Company owns and/or holds crypto assets on behalf of third parties in connection with its lending and borrowing activities that are described in Comment 47. As noted in Comment 47, such activities are not material to the Company’s business. The Company will continue to evaluate its disclosure as it relates to crypto assets that serve as collateral in connection with its lending and borrowing activities in future filings with the Commission to the extent such arrangements become material. Read in the reply ↗

We note recent news articles discussing fraudulent tokens that were traded on your Base blockchain. Please update your disclosure and describe any potential material adverse effect these events may have on your business, operating results, financial condition, or cash flows.

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Additionally, identify the steps, if any, you are taking to remedy these breaches, and material changes, if any, that have been made to your processes in light of these events.

Company advises the Staff that Base is an open source permissionless “Layer 2” (“L2”) protocol built on the Ethereum blockchain that was developed by the Company. Base is similar to a telecommunications network, like the internet, where anyone can create a website or online service. While there can be safeguards and end-point filters (like web browsers warning about insecure sites), the network itself remains fundamentally free and permissionless. Just as telecommunication networks do not pre-vet every website, the open-source nature of L2 platforms allows any token to be deployed.

Rest of the answer

Because of the permissionless nature of Base, the Company does not have direct control over the tokens or projects that choose to build upon or utilize the Base protocol. However, the Company prioritizes end-point compliance (including through OFAC and sanctions-related screenings), security (through Coinbase app-level security measures and the Company’s ability to prevent consumers from interacting with previously identified malicious token addresses), and transparency (through the open source nature of the Base protocol). Because Base was only recently launched publicly, to date, adoption has been limited and revenue from Base has been immaterial (comprising less than [*]% of the Company’s revenue for the nine months ended September 30, 2023), the Company will continue to evaluate its disclosure as it relates to Base in future filings with the Commission to the extent Base becomes material. However, in response to the Staff’s comment, the Company will revise the disclosure beginning with its Form 10-Q for the quarter ended September 30, 2023 to add disclosure substantially similar to the following to the risk factor titled “Our platform may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams. If any of our customers use our platform to further such illegal activities, our business could be adversely affected.”: “Base, an open source permissionless L2 protocol built on the

Ethereum blockchain developed by us, has been in the past, and may in the future, be a target for scam tokens or other illegal activity. For example, in August 2023, a number of fraudulent tokens were identified and traded on Base blockchain. As we continue to develop Base, and in light of this fraudulent activity, we continue to invest in improving our security processes, including through our in-house blockchain monitoring capabilities, third-party tools for identifying malicious and out of pattern events, and the monitoring of contract source code and bytecode on Base against a database of known scam code patterns. While to date, such illegal or fraudulent activity on Base has not had a material impact on our business, operating results, financial condition, or cash flows, future illegal activity may have an adverse impact on our business, operating results, financial condition or cash flows and our efforts to identify and remedy such illegal or fraudulent activity may not be successful.”

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We note your disclosure under this heading that you may issue shares of capital stock, including in the form of blockchain tokens, to your customers in connection with customer reward or loyalty programs. Please disclose whether you have any specific plans to issue blockchain tokens in the near term, and whether you have determined the rights and obligations and mechanics of such an issuance.

The Company advises the Staff that it does not have any specific plans to issue blockchain tokens in the near term, nor has it determined the details or mechanics of such an issuance. Read in the reply ↗

We note your disclosure that Adjusted EBITDA for the full year ended December 31, 2022 is expected to be within the negative $500 million loss guardrail that the Company provided in the November 3, 2022 Shareholder Letter. Please tell us your consideration of the required non-GAAP prominence disclosures required by Item 10(e)(1)(i) of Regulation S-K for Adjusted EBITDA.

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Refer to Regulation G and Non-GAAP Financial Measures C&DI Question 102.10.

Staff that the Company has reviewed Item 10(e)(1)(i) of Regulation S-K and Regulation G and Non-GAAP Financial Measures C&DI Question 102.10 and that the Company does not believe its disclosure regarding a loss guardrail represents a non-GAAP financial measure because it did not represent a specific numerical financial measure and was not intended to convey a forward-looking non-GAAP financial measure.

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Instead, the disclosure was intended to merely note to investors that the Company was expecting Adjusted EBITDA to be within a general and broad Adjusted EBITDA guardrail that the Company was managing to and had previously communicated. The Company further notes that it observed the non-GAAP prominence disclosure requirements with respect to its actual reported

Adjusted EBITDA for the year ended December 31, 2022 in its February 21, 2023 Shareholder Letter.

However, to the extent that the Company includes a similar loss guardrail disclosure in future filings, the Company advises the Staff that it will either provide the comparable GAAP measure with equal or greater prominence and include a reconciliation as contemplated by Regulation G, or include a statement that such a reconciliation could not be presented without unreasonable efforts consistent with the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K and the Staff’s position set forth in Regulation G and Non-GAAP Financial Measures C&DI Question 102.10(b).

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We note your disclosure on page 5 of your Shareholder Letter that in Q1 subscription and services revenue grew 28% Q/Q to $362 million and that when applying constant Q1 average crypto prices to prior quarters, subscription and services revenue would have grown approximately 24% in Q1 compared to Q4. Please provide the required non- GAAP disclosures for your constant average crypto price measure.

Rest of the question

Refer to Non-GAAP Financial Measures C&DI Question 104.06, Reg G and Item 10(e) of Regulation S-K.

The Company advises the Staff that it has reviewed Non-GAAP Financial Measures C&DI Question 104.06, Regulation G and Item 10(e) of Regulation S-K and will provide the required non-GAAP disclosures with respect to its constant average crypto price disclosure in future Shareholder Letters beginning with its Shareholder Letter for the quarter ended September 30, 2023. Read in the reply ↗

We note from your Q1 2023 earnings transcript on page 1, that you state you had positive adjusted EBITDA in Q1. We also note that you do not mention your net loss for the quarter until page 3. Please tell us, for both your Q1 and Q2 2023 earnings disclosures, your consideration of the required non-GAAP prominence disclosures required by Item 10(e)(1)(i) of Regulation S-K for Adjusted EBITDA .

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Refer to Regulation G and Non- GAAP Financial Measures C&DI Question 102.10.

The Company advises the Staff that it has reviewed Item 10(e)(1)(i) of Regulation

S-K, Regulation G and Non-GAAP Financial Measures C&DI Question 102.10. The Company notes that the non-GAAP prominence disclosures required by Item 10(e)(1)(i) of Regulation S-K apply when non-GAAP financial measures are included in a filing with the Commission and in earnings materials furnished under Item 2.02 of Form 8-K.

Rest of the answer

The Company’s Q1 2023 and Q2 2023 earnings transcripts have not been filed or furnished with the Commission and therefore the Company respectfully advises the Staff that it does not believe the non-GAAP prominence rules apply to such disclosures. The Company advises the Staff that it will continue to present its non-GAAP financial measures in future materials filed with the Commission or furnished to the Commission pursuant to Item 2.02 of Form 8-K in a manner consistent with the non-GAAP prominence disclosures required by Item 10(e)(1)(i) of Regulation S-K.

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Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at (415) 875-2432, or, in his absence, Ran Ben-Tzur at (650) 335-7613.

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