Profit Decline Exceeds 60% for Coinbase’s Irish Subsidiary in Cryptocurrency Trading Sector
Coinbase Ireland Ltd, a significant branch of the US-based cryptocurrency exchange Coinbase, has experienced a notable decline in both profits and turnover during the year 2023, according to its most recent financial disclosures.
As a platform, Coinbase enables users to trade various cryptocurrencies, offering services that include purchasing, selling, and safeguarding digital assets.
Internationally recognized as one of the prominent cryptocurrency exchanges, Coinbase’s performance metrics in Ireland reflect downturns, with its 2023 turnover reaching just €29.5m, which is a stark reduction of nearly 68% from the preceding year’s €91.6m.
This downturn is mirrored in the firm’s pre-tax earnings as well, which saw a decrease to €1.7m in 2023, down from €4.8m in 2022, marking a 64.6% fall.
Coinbase Ireland opted not to propose dividend distributions to its parent company for both the 2023 and 2022 fiscal years.
As the year concluded, the subsidiary reported having €103.3m in cash resources and held €373m in customer assets.
Presently, Coinbase Ireland is gearing up to meet the upcoming EU regulatory mandates that are set to be initiated soon.
The evolving regulatory landscape is perceived as a potential risk to the company’s ability to remain competitive and sustain operations.
The Markets in Crypto-Assets Regulation (MiCA), which manages crypto-asset service providers and utility token issuers with new rules, is anticipated to become effective the following month.
“MiCA will establish a rigorous licensing and compliance framework for crypto asset service providers, as well as disclosure obligations for certain crypto asset issuers, potentially affecting our business operations,” the company stated.
The company emphasized that all crypto asset service businesses in Ireland must align with MiCA by the end of the transition period in December 2025.
Another regulatory development, the Digital Operational Resilience Act (DORA), concerns ICT services provided by third parties to financial entities in the EU and might lead to higher expenditures for operational and capital needs.
DORA is expected to come into force in January.
Coinbase established its Dublin office in 2018 and designated Ireland as its chief regulatory and operational center in the EU in October of the previous year.
Cryptocurrencies, including Bitcoin, have recently gained momentum following the announcement of Donald Trump’s victory in the US presidential election.
During his campaign, Trump espoused a pro-digital asset stance, with aims to position the US as the global epicenter for cryptocurrency and to accumulate a substantial Bitcoin reserve.
Bitcoin, the flagship cryptocurrency, soared to an all-time high of $99,800 (€94,550) last week, later receding to about €95,000.
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