Coinbase Global (COIN) Risk Factor Changes

Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulatio…

Our bylaws, to the fullest extent permitted by law, provides that the Business Court in the First Business Court Division of the State of Texas is the exclusive forum for any derivative action or proceeding brought on…

Our bylaws and certificate of formation contain an exclusive forum provision and jury trial waiver for certain claims, respectively, which could limit our shareholders’ ability to obtain a favorable judicial forum for…

Moreover, Subchapter M of Chapter 21 of the Texas Business Organizations Code (the “TBOC”) may discourage, delay, or prevent a change of control of our company, and imposes certain restrictions on mergers, business co…

•provide for advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at annual shareholder meetings.

•provide that only our Chief Executive Officer, the chairperson of our board of directors, a majority of our board of directors, or the holders of not less than 50% of the voting power of our shareholders will be auth…

•require super-majority voting to amend some provisions in our certificate of formation and bylaws;

Provisions in our certificate of formation and bylaws may have the effect of delaying or preventing a merger, acquisition, or other change of control of our company that the shareholders may consider favorable.

In October 2024, our board of directors authorized and approved a share repurchase program, which provided for the repurchase of up to $1.0 billion of our outstanding Class A common stock without expiration.

The trading market for our Class A common stock may be influenced by the research and reports that securities or industry analysts publish about us or our business, our market, and our competitors.

Further, certain holders of shares of our common stock will have rights, subject to some conditions, to require us to file registration statements for the public resale of shares of Class A common stock or to include…

Our Class B common stock has twenty votes per share, and our Class A common stock has one vote per share.

The dual class structure of our common stock has the effect of concentrating voting control with those shareholders, including our directors, executive officers, and 5% shareholders, and their respective affiliates.

Furthermore, the stock market has recently experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies and financial services an…

•rumors and market speculation involving the onchain economy and the regulation thereof, or us or other companies in our industry;

•the highly volatile nature of the onchain economy and the prices of crypto assets;

We have funded our operations since inception primarily through equity financings, debt, and cash flows generated from operations.

natural disasters, fire, power shortages, and other events beyond our control.

We are exposed to fluctuations in foreign currency exchange rates.

Realization of our deferred tax assets, in the form of future domestic or foreign tax deductions, credits or other tax benefits, will depend on future taxable income, and there is a risk that some or all of such tax a…

As a result of these and other factors, the ultimate amount of tax obligations owed may differ from the amounts recorded in our financial statements and any such difference may harm our operating results in

Further, any changes in the tax laws governing our activities may increase our tax expense, the amount of taxes we pay, or both.

Our employees and service providers work from home and we are a remote-first company.

similar risks, have in the past and may in the future lead to market-wide liquidity problems.

We frequently engage in a wide variety of transactions and maintain relationships with a significant number of crypto projects, their developers, members of their ecosystem, and investors.

Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our inte…

Our use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation.

We do not intend to monetize our patents or attempt to block third parties from competing with us by asserting our patents offensively, but our ability to successfully defend intellectual property challenges from comp…

Our business depends in large part on our proprietary technology and our brand.

We may also be directly or indirectly liable to the payment networks for rule violations.

There can be no assurance that the use of AI and machine learning solutions and features will enhance our products or services, produce the intended results, or be beneficial to our business, including our efficiency.

Our use of AI may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory regulation and scrutiny, litigation, compliance issues, ethical concerns, confidentiality or secu…

We are also subject to evolving privacy laws on cookies and e-marketing and online behavioral advertising.

We are subject to, or may become subject to, the E.U.’s and the U.K.’s General Data Protection Regulation (collectively, the “GDPR”), the E.U.

Furthermore, we may be required to disclose personal data pursuant to demands from individuals, regulators, government agencies, and law enforcement agencies in various jurisdictions with conflicting privacy and secur…

We collect and process large amounts of sensitive data, including personal data related to our customers and their transactions, such as their names, addresses, social security numbers, visa information, copies of gov…

Any transaction in a commodity, including a crypto asset, entered into with or offered to retail investors using leverage, margin, or other financing arrangements (a “retail commodity transaction”) is subject to CFTC…

Many of the crypto assets and other products, such as event contracts, in which we facilitate trading are subject to regulatory authority by the CFTC.

how we manage and hold customer fiat currency, stablecoins, and crypto assets.

Competitors, including traditional financial services, have spent years cultivating professional relationships with relevant policymakers on behalf of their industry so that those policymakers may understand that indu…

The onchain economy is novel.

Uncertainties in or changes to regulatory or financial accounting standards could result in the need to change our accounting methods and may retroactively affect previously reported results and impair our

The accounting rules and regulations that we must comply with are complex and subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and various other bodies formed to promulgate…

Similarly, new rules for reporting crypto assets under the global “common reporting standard” (CRS) and the “crypto-asset reporting framework” (CARF) have been implemented on our operations, creating new obligations a…

Although we believe we are compliant with U.S.

In 2021, the U.S.

Our tax information reporting obligations with respect to crypto transactions may be subject to further scrutiny in light of the implementation of the U.S.

The crypto asset market has been characterized by significant volatility and unexpected price movements, and has experienced significant declines in the past.

not be able to recover its investment, the risk that any underlying collateral may experience significant volatility, and the risk of certain core developers with protocol administration rights can make unauthorized o…

We hold investments in various DeFi protocols.

Our brand and reputation are key assets and a competitive advantage.

In the future, the pace and scale of our acquisitions may increase and may include larger acquisitions than we have done historically.

In connection with our Prime trading service, we routinely route customer orders to third-party exchanges or other trading venues.

collateral is not guaranteed under applicable state law or the Uniform Commercial Code and therefore we may be exposed to loss in the event of a customer default, even if we appear to be secured against such default.

We have a substantial amount of indebtedness and other obligations.

If our cash flows are insufficient to fund our debt and other obligations and we are unable to refinance or restructure these obligations on commercially reasonable terms or at all, we could face substantial liquidity…

behalf.

We may not be able to penetrate or successfully operate in the markets we choose to enter.

States, and our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to particular challenges of supporting a growing busine…

Our products, services and educational offerings incorporate a holistic, customer-centric set of digital engagement practices, including educational content and notifications, which are designed, in part, to promote f…

Additionally, from time to time, we have realigned our resources and talent to meet evolving business needs.

will result in corresponding and offsetting revenue growth.

We have experienced, and may experience in the future, periods of significant growth.

Our operating expenses may increase in the future as we continue to grow our business.

•regulatory and governmental bodies in countries that we target for expansion express negative views towards crypto asset trading platforms and, more broadly, our industry; or

stored and secured at facilities within the United States and internationally.

We place great importance on securely storing crypto assets we custody and keeping them bankruptcy remote from our general creditors, and in June 2022 we updated our Retail User Agreement to clarify the applicability…

Securely storing customers’ cash and crypto assets is integral to the trust we build with our customers.

We hold cash and store crypto assets on behalf of our customers and hold fiat and crypto for corporate investment and operating purposes.

denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunicati…

Our reputation and ability to attract and retain customers and grow our business depends on our ability to operate our service at high levels of reliability, scalability, and performance, including the ability to proc…

However, if these financial institutions are subject to bank resolution or failure, or limit or end their crypto market activity, or if such relationships become severely limited or unavailable to crypto market partic…

PATRIOT Act of 2001, and its implementing regulations enforced by FinCEN, or collectively, the BSA, a licensed money transmitter in a number of U.S.

Loss of a critical financial institution or insurance relationship could adversely affect our business, operating results, and financial condition.

We rely on third parties in connection with many aspects of our business, including payment processors, financial institutions, and payment gateways to process transactions; cloud computing services and data centers t…

Further, if Bitcoin, Ethereum, stablecoins or any other supported crypto asset is deemed to be a security under any U.S.

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 trade…

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 on…

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 applic…

The SEC has also brought enforcement actions and entered into settlements with numerous industry participants alleging that certain digital assets are securities.

v.

Our industry has been characterized by many rapid, significant, and disruptive products and services in recent years.

Regulators worldwide frequently study each other’s approaches to the regulation of our industry.

such as by requiring crypto asset exchanges operating in their local jurisdictions to be regulated and licensed under local laws.

•the ability to trade crypto assets and offer products and services, including non-crypto financial products and services, that we do not support or offer on our platform (due to constraints from regulatory authoritie…

•decentralized and noncustodial platforms; and

We operate in a highly competitive industry and our business, operating results, and financial condition could be adversely affected if we are unable to compete effectively.

Due to our business activities, we are subject to ongoing examinations, oversight, and reviews and currently are, and expect in the future, to be subject to investigations and inquiries, by U.S.

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 the Base App (formerly Coinbase Wallet), a standalone mob…

We may be further subject to administrative sanctions for technical violations or customer attrition if the user experience suffers as a result.

Moreover, we offer and may in the future offer products and services that may depend on novel forms of customer engagement and interaction delivered via blockchain protocols, particularly as it relates to management o…

Although we have developed systems and processes designed to protect the data we manage, prevent data loss and other security breaches, effectively respond to known and potential risks, and expect to continue to expen…

are also inherent security weaknesses in some crypto assets, such as when creators of certain crypto networks use procedures that could allow hackers to counterfeit tokens.

The level of prevailing short-term interest rates affects our profitability because we derive a large portion of our revenue from interest earned on funds deposited with us by our customers which we hold on their beha…

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 enhancement of our plat…

Our subscription and services revenue has grown over time to represent a more meaningful amount of our revenue, primarily due to growth in stablecoin revenue received in connection with payment stablecoins.

•liquidity and credit risk issues experienced by other crypto platforms and other participants of the onchain economy; and

•developments in mathematics and technology, including in digital computing, algebraic geometry, and quantum computing that could result or be perceived to result in the cryptography being used by Bitcoin and Ethereum…

While we support a diverse portfolio of crypto assets for trading, staking and custody, our net revenue is concentrated in a limited number of areas, such as transactions in Bitcoin and Ethereum for transaction revenu…

•the liquidity and credit risk of other crypto platforms and other participants of the onchain economy;