Coinbase, in the midst of regulatory scrutiny from the SEC and a sluggish crypto market, is seeking additional recurring revenue with the launch of its subscription service, Coinbase One.
After testing the program since November 2021, Coinbase One has now emerged from beta and is available in the US, UK, Germany, and Ireland, with plans for expansion to 31 more countries in the near future. Phil McDonnell, Coinbase’s senior director of product management, emphasized the shift from a purely transactional relationship, stating, “Maybe 18 months ago, it was very transactional. People come in, trade, pay a fee, and that was the relationship.”
By subscribing to Coinbase One, users can enjoy benefits such as exemption from trading fees within a per-user trading volume limit and enhanced staking rewards. This move allows Coinbase to diversify its revenue streams and counterbalance the financial strain resulting from ongoing regulatory battles.
McDonnell further explained, “Through the bull market 18 months to two years ago, there was tons of growth, but we wanted customers to stay.” According to TechCrunch, Coinbase’s subscription and services revenue experienced a remarkable 138% growth in the first quarter of this year, generating $361.7 million, compared to $152 million in the previous year.
However, Coinbase faces challenges due to a weakening crypto market with fewer active traders and an investigation by the US Securities and Exchange Commission into potential securities law violations. In addition, the company recently incurred a $50 million fine from the New York State Department of Financial Services (NYDFS) for non-compliance with anti-money laundering regulations, coupled with an obligation to spend an additional $50 million on compliance measures.
Beyond the SEC’s scrutiny, other US government entities such as the Commodity Futures Trading Commission, Federal Bureau of Investigation, and Department of Justice have also shown increased interest in regulating crypto firms. The past year and a half has been a difficult period for the cryptocurrency industry as a whole.
