Coinbase Custody, SEC Lawsuit Drop, and Deribit Acquisition

Coinbase sues the SEC: Crypto startups are getting a lot of coverage from Coinbase’s accounts, as the public web3 giant is using its capital to try force favor regulatory action for its sector. The Block reports that Coinbase is suing over Freedom of Information Act requests that it submitted. theblock.co/post/302145/c..

Coinbase announced it has agreed to buy Deribit, the world’s biggest crypto options exchange, for $2.9 billion, the biggest merger deal ever in the crypto industry. The deal will allow Coinbase to fill a missing piece in its derivatives business and push deeper into areas long dominated by big offshore exchanges. Unlike Binance and OKX, Coinbase doesn’t offer #Crypto options trading yet. It has a small but growing derivatives business, launched in 2023, that offers crypto futures. Deribit, founded in 2016 and headquartered in Dubai, processed $1 trillion in trades last year. It’s popular among big market makers such as Galaxy Digital, GSR, and Akuna Capital. In the U.S., CME also offers bitcoin and ether options. Coinbase will pay $700 million in cash and 11 million shares for the transaction, which is expected to close by the end of the year, subject to regulatory approvals. The transaction price is lower than the $4 billion to $5 billion valuation that Deribit might be fetching as reported by Bloomberg in January. Crypto M&A has been heating up amid a favorable regulatory environment under President Donald Trump. Last week, Kraken completed its $1.5 billion acquisition of U.S. retail futures trading platform NinjaTrader, the second biggest crypto deal ever. Stripe closed its acquisition of Bridge, a stablecoin infrastructure firm, for $1.1 billion in February. Later Thursday, Coinbase reported first-quarter revenue of $2 billion, down 10% from a quarter ago, due to lower trading revenue. Net income for the quarter was $66 million, down from $1.3 billion a quarter ago, driven by unrealized loss of $597 million on its crypto asset investment portfolio. During the first quarter, Coinbase purchased $153 million crypto assets for its corporate investment portfolio, primarily in bitcoin. coinbase.com/blog/coinbas..

Coinbase is going through its biggest leadership shuffle in recent years. Today, the company said Chief People Officer Lawrence Brock was stepping down to become an adviser. And Greg Tusar, co-head of Coinbase Institutional, is transitioning to a new role focusing on policy, according to a person familiar with the plan.  The changes follow news earlier this month that Chief Legal Officer Paul Grewal was planning to leave to join a startup. And last week, Coinbase executive Jesse Pollak said he’s stepping back from leading the Base app after acknowledging his earlier strategy of focusing on creator coins had failed.  The leadership shake-up comes as Coinbase, navigating a crypto downturn, is transitioning from a crypto platform to an “everything exchange,” a one-stop shop for trading stocks, prediction markets and crypto. At the same time, the company is cutting costs: It laid off 14% of staff in May. Meanwhile, it’s promoting people from within the firm to replace the old guard.