CoinShares ‘Unsure’ It Can Recover Any of $31M FTX Exposure

European cryptoasset manager CoinShares reported a 29% drop in fourth quarter combined income from the third quarter of 2022, the company said in its earnings report Tuesday. 

CoinShares brought in around $17.5 million in revenue, gains and other income in the last quarter of 2022, compared with about $50.6 million a year prior. 

An overall decline in market health, combined with a variety of crises in the space, most notably the collapse of exchange FTX, contributed to slower growth, Jean-Marie Mognetti, CEO of CoinShares, said. The asset manager’s exposure to FTX sits at around $31 million, and there is no guarantee any amount will be recovered. 

“After returning to profitability in Q3, CoinShares, as announced on 22nd November, was dealt a blow with the collapse of FTX in Q4,” Mognetti said. “As previously disclosed, at the time FTX halted withdrawals, £26 million of our assets remained there.”

CoinShares’ revenue for all of 2022 came in 31% lower from 2021, the earnings showed. The adjusted earnings before interest, tax, depreciation and amortization (EBITDA) showed a loss of $28.5 million, putting CoinShares’ full-year EBITDA at -$7.9 million. 

“While the Group’s financial health remained solid, providing for these amounts in full has understandably impacted on our financial performance for both Q4 and 2022 as a whole,” Mognetti added, referring to the company’s relationship with FTX. 

CoinShares did highlight some successes from last year in its report; noting the firm moved from being listed on Nasdaq First North Growth Market to earning a spot on the Nasdaq Stockholm Main Market. CoinShares stock is up about 8.5% over the past month. 

The earnings come as regulatory pressure continues to heat up in the US, contributing to $32 million in outflows from crypto investment products last week, CoinShares reported in its weekly fund flows report Monday. Still, crypto prices seem to be relatively stable, CoinShares noted. 

“The negative sentiment amongst ETP investors was not expressed in the broader market with Bitcoin prices rising by 10% over the week, this price appreciation pushed total assets under management (AuM) to US$30bn, their highest level since August 2022,” James Butterfill, head of research at CoinShares, wrote in the report. 

“We believe this is due to ETP investors being less optimistic on recent regulatory pressures in the US relative to the broader market.”


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Source: https://blockworks.co/news/coinshares-unsure-it-can-recover-any-of-31-million-ftx-exposure