Coinbase Global Inc. in its first months as a public company has built a $4 billion cash stockpile as it benefits from a trading frenzy and prepares for closer regulatory scrutiny.
Coinbase has socked away cash in part to weather a host of business risks in the crypto industry, according to Chief Financial Officer Alesia Haas. The company stress-tests its balance sheet to ensure it has adequate funds on hand to prepare for a stricter regulatory regime, possible cyberattacks or potential trading declines, according to Ms. Haas. It also maintains additional cash as insurance against risks it hasn’t yet identified, she said.
“We want to ensure that we maintain those cash reserves so that we can continue to invest and continue to grow our products and services in the event that we go into a crypto winter,” Ms. Haas said.
A recent surge in trading, including among individual investors, has buoyed Coinbase’s profits. The company earned $1.61 billion during the second quarter, compared with $32 million a year earlier. Retail monthly transacting users increased roughly sixfold over the same period, to 8.8 million. The company has about 9,000 institutional customers.