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

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

article-image

T. Schneider/Shutterstock.com modified by Blockworks

share

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.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly

article-image

Plus, all the world is green as prices across the crypto space rally, with solana reaching a nearly two-week high

article-image

Investors add to crypto positions after “turnaround in sentiment due to lower-than-expected CPI,” CoinShares research head says

article-image

Plus, Ethereum is in the midst of a vibecession