More problems for Coinbase- The Cryptonomist

Coinbase: problems continue with losses

It is certainly not a good time for the most prominent American and global crypto exchange platform, Coinbase.

The California-based company that has about 98 million users in more than 100 countries around the planet and has been listed on Nasdaq since 2021 is grappling with reported losses of more than $1 billion.

The quarterly report from April to June brought no joy to either investors or analysts as it showed an overall loss of $1.09 billion in just three months which contrasts sharply with the $1.61 billion recorded in the same period in 2021.

The negative numbers, however, do not only concern double-entry but also trading volumes that do not deliver good news, these have in fact slowed down considerably due to a bear market and with a recession just around the corner, it has gone from the $462 billion obtained in the previous period to the current $217 billion.

This picture has inevitably led to difficult choices and as a result of a general contracting of the economy and specifically of cryptocurrency assets, the company has opted for a cut of about 1100 jobs which is one of the largest mass layoffs in recent periods in opposition to the general figure recently released by the White House on the health of the American workforce.

Coinbase: reduction in workforce

The reduction of 1100 workers is equal to one-fifth of the entire workforce of the US exchange.

As if that were not enough, George Kattula filed a lawsuit with the state of Georgia on Monday against Coinbase Wallet, guilty of transferring funds without the user’s permission as a result of an email fraud by some miscreant or hacker asking for a password change posing as the same company.

Kattula claimed to have lost an amount of US$6,000 in cryptocurrency for his account as a result of an attempted password change that was not blocked by Coinbase‘s defense system.

According to the user who claims to have been defrauded and robbed of $6,000 in crypto Coinbase did not do enough nor was it timely in responding to calls for help from the customer who was thus robbed of his assets without being able to do anything about it.

“Coinbase improperly and unreasonably prevents its consumers from accessing their accounts and funds, for long periods of time or permanently. Due to the extreme volatility of the value of cryptocurrencies with free falls of 40% within 24 hours not unheard of, the inability to access an account to sell, buy or exchange cryptocurrencies leads to serious financial losses for account holders”.

Legal fights in the crypto world are the order of the day and seem to be the SEC‘s favorite stomping ground lately, which is how the US Internal Revenue Service (IRS) got a pass to examine anyone who made crypto transactions worth at least $20.000 from 2016 until the end of 2021 for clients of SFOX Inc. (a cryptocurrency brokerage firm), at the same time the Securities and Exchange Commission (SEC) opposed a judge’s order to disclose drafts of a speech by a former official in the lawsuit filed with Ripple (XRP).

“Taxpayers who transact with cryptocurrency should understand that the income and earnings from cryptocurrency transactions are taxable. The information required by the citation approved today will help ensure that cryptocurrency owners comply with tax laws”.

This was stated by Attorney General David Hubbert of the Justice Department’s Tax Division.

As for Ripple (XRP), the US SEC objected to the executive order requiring it to disclose drafts of a 2018 speech made by former SEC Director William Hinman saying they do not matter and that even if they did they are protected by the deliberative process.

The contention between Ripple (XRP) and the SEC is the attempt by CEO Brad Garlinghouse and co-founder Christian Larsen to profit about $600 million improperly from the company, at least that is what the commission assumes.