Coinbase Listing: The Journey From Y Combinator to Nasdaq

It wasn’t always clear that Coinbase was going to be a profitable company in the long term.

The crypto exchange set to list on Nasdaq on Wednesday had to husband its resources during the industry’s prosperous times to make it through the lean periods. 

“There have been a lot of moments in Coinbase’s past where the right person made the right call,” said Asiff Hirji, president of blockchain mortgage platform Figure and former Coinbase president and chief operating officer. “In the first crypto winter, they hung in there with their business model and saving enough cash to preserve through the winter. That’s an amazing call to make.” 

Hirji recalled planning for 2018. "We had done a billion dollars in revenue in 2017 and said that next year we were planning on doing $500 million in revenue. [The board] was used to [feverlines moving] up and to the right and we told them ‘We are a highly volatile business.’ … We assumed that on Jan. 1, 2018, bitcoin would crash. We were only off by a quarter.”

Bitcoin’s future was just as uncertain as the company’s own in the early days.

“It was not clear that the cryptocurrency experiment would even work,” said Olaf Carlson-Wee, the first hire at Coinbase, now the CEO and founder of Polychain Capital. “Now we talk about market share in cryptocurrency or cryptocurrency competing with fintechs and things like that. At the time, this was much more existential and was about whether the entire category would work and most of those early Coinbase folks were true believers that had faith that this was an incredibly new technology.”

That belief now appears to be vindicated with Goldman Sachs advising Coinbase on the listing and the coveted COIN ticker secured.

Following is a timeline tracing Coinbase’s journey from the Y Combinator incubator, through those uncertain periods described by Hirji and Carlson-Wee, to its imminent multibillion-dollar stock market debut.

Brian Armstrong leaves Airbnb to start Coinbase. (Former Goldman Sachs Trader Fred Ersham will join later as co-founder.) The company raises $600,000 in seed funding from Y Combinator and other investors. (link, link)

Spring: Coinbase registers as a money services business with the Financial Crimes Enforcement Network (FinCEN). (link) 

May 7: Coinbase scores a $5 million Series A, the largest crypto funding round at the time. (link)

Aug. 2: Litecoin creator Charlie Lee leaves job at Google to join Coinbase. (link)

Aug. 16: With fresh capital, Coinbase allows users to send friends bitcoin and refer them to Coinbase via text or email. (link, link) 

Dec. 12: Coinbase breaks crypto funding records again with a $25 million Series B from Andreessen Horowitz and others with a16z partner Chris Dixon joining the board. (link)

Dec. 19: In less than a year, Coinbase gains more than 650,000 retail users. (link)

Dec. 30: Coinbase launches a point-of-sale app allowing physical retailers to accept bitcoin payments. (link)

Jan. 9: Overstock.com becomes the first major retailer to accept bitcoin using Coinbase. Over the next several months, Coinbase will add Dell, Expedia and Stripe as merchant processing clients. (link, link, link, link)

Jan. 15: Coinbase launches a security update that allows users to have their keys split into pieces and kept in vaults around the world. (link) 

Feb. 25: Bitcoin scholar Andreas Antonopoulos inspects Coinbase’s bitcoin reserves and security practices. (link)

May 6: Coinbase makes its first acquisition: Content sharing company Kippt, which helped the company create its app gallery. (link) 

July 2: Coinbase launches “Vault,” a more secure wallet designed for institutions and wealthy individuals. Vault offers security features that are common among enterprise bank accounts, such as requiring multiple approvals for withdrawal. (link)

Aug. 18: Coinbase acquires blockchain explorer Blockr.io. (link) 

Sept. 10: Coinbase enters Europe with bitcoin buying and selling services in 13 European Union countries. (link)

Sept. 14: Coinbase releases Toshi, a free application programming interface (API) wallet toolkit for bitcoin app developers. (link)

Oct. 24: Coinbase introduces a bitcoin buy, sell and send app for iOS. It will be removed from the app store by Apple a month later, presaging a long struggle for the sector to reach the world’s millions of iPhone and iPad users, and eventually reinstated. (link, link, link)

Jan. 20: Coinbase raises $75 million in Series C funding. Investors include New York Stock Exchange parent company Intercontinental Exchange, financial services trailblazer USAA, and Spanish megabank BBVA. (link)

Jan. 26: Coinbase Exchange is launched, allowing individuals and institutions in 24 states to trade bitcoin. Unlike Coinbase’s existing bitcoin buying and selling services, which were geared toward entry-level users, this one is designed for professional investors. (link)

Feb. 17: The Washington Free Beacon reports a Coinbase slide deck told Series D investors that one of the benefits of bitcoin was the ability to evade international sanctions. According to Jeff John Roberts’ book "Kings of Crypto," this led to Coinbase losing its relationship with Silicon Valley Bank. Roberts also claims that the incident led to the firing of then-Chief Compliance Officer Martine Niejadlik. (link, link, link)

July 5: Canadian payments processor Vogo shuts down, forcing Coinbase to pull out of Canada. (link)

Sept. 2: Coinbase expands to Canada and Singapore with retail buy and sell operations. (link)

May 19: Coinbase allows traders to buy, sell, and hold ether, the native token of the Ethereum blockchain, while rebranding its exchange to Global Digital Asset Exchange (GDAX). (link)

July 21: Coinbase wallet users are given the ability to trade ether. (link) 

July 26: Coinbase expands bitcoin buying service to Australia. (link)

Nov. 18: The Internal Revenue Service (IRS) asks Coinbase for the records of all customers who bought digital currency through the exchange from 2013 to 2015, kicking off a year-long legal battle. (link)

Jan. 17: Coinbase receives a BitLicense from the New York Department of Financial Services (NYDFS). (link) 

March 21: Coinbase adds margin trading to its bitcoin exchange. (link)

March 22: NYDFS allows Coinbase to offer ether and litecoin in New York. (link) 

Aug. 10: Coinbase breaks another crypto funding record with a $100 million Series D. Dropbox, GitHub and Netflix participate. (link)

December: Coinbase experiences several outages as bull market activity overwhelms its servers – a problem that will resurface in the next run-up, three years later. (link, link)

Dec. 19: Coinbase lists bitcoin cash (BCH), a splinter currency, or fork, created in the wake of the Bitcoin community’s acrimonious debate over scaling. After unusual trading activity, the exchange delisted BCH and launched a months-long internal insider trading investigation led by two national law firms that finds no insider trading of BCH. (link, link, link, link, link) 

Dec. 20: BCH’s price on Coinbase rises to almost three times the price of that seen on other exchanges. Coinbase halts trading in the coin and opens an insider training investigation. (link) 

Feb. 26: Settling its court dispute, Coinbase provides data to the IRS on 13,000 customers with transactions totaling more than $20,000. The information includes taxpayer IDs, names, dates of birth, addresses and transactions records from 2013 to 2015. (link)

March 26: Coinbase adds support for Ethereum ERC-20 tokens, a prerequisite for listing a wide range of assets created on the second-largest blockchain. (link)

April 5: Coinbase launches Coinbase Ventures, an incubator fund for early-stage startups. On the same day, Coinbase announces it will allow customers to withdraw funds from bitcoin forks. (link, link)

April 16: Coinbase acquires cryptocurrency social network Earn.com. As part of the deal, Earn CEO Balaji Srinivasan joins Coinbase as chief technology officer. (link)

May 15: Coinbase launches Coinbase Custody, a crypto storage service for large financial institutions. (link)

May 15: Coinbase offers Coinbase Prime, a high-touch brokerage service for institutional investors. (link)

May 16: Coinbase Ventures invests in decentralized lending protocol Compound. (link)

May 23: Coinbase rebrands GDAX to Coinbase Pro and acquires decentralized exchange Paradex. (link)

Aug. 6: Coinbase hires Amazon Cloud executive Tim Wagner as vice president of engineering. (link)

Aug. 15: Toshi rebrands as Coinbase Wallet. (link)

Oct. 23: Coinbase and Circle form CENTRE consortium for standardizing cryptocurrencies designed to hold their value. Coinbase lists its first dollar-backed stablecoin, Circle-issued USD coin (USDC). (link, link) 

Oct. 30: Coinbase raises $30 million in a Series E led by Tiger Global at an $8 billion valuation. (link)

Jan. 7: Coinbase halts ethereum classic (ETC) trading after it detects a “double-spend” attack on the cryptocurrency’s network. (link, link, link)

Feb. 19 to March 4: Coinbase acquires Italian blockchain analytics startup Neutrino. The acquisition sparks outrage because Neutrino’s founders used to work at Hacking Team, a surveillance company with a history of selling spyware to governments with poor human rights records. Armstrong later announces that Coinbase will fire the employees who used to work for Hacking Team. (link, link, link)

April 18: Reuters estimates that Coinbase made almost $520 million in global revenue in 2018. (link, link)

May 4: Srinivasan departs Coinbase after serving the minimum agreed period. (link)

Aug. 8: Coinbase reports that a sophisticated hacker tried to attack its internal network using social engineering, spear-phishing and vulnerabilities in the Firefox browser. The Coinbase network wasn’t compromised and no crypto was stolen. (link)

Sept. 30: Coinbase co-founds the Crypto Rating Council with seven other firms to help crypto companies determine if they’re complying with U.S. federal securities law. (link)

March 9: Coinbase suggests that all employees work from home as COVID-19 spreads in the United States. (link)

May 20: Armstrong announces Coinbase will remain a remote-first company even after the pandemic. (link)

May 27: Coinbase acquires Tagomi, a prime brokerage platform specializing in digital asset trading. The deal has been in the pipeline since the fall. Coinbase reportedly pays between $75 million and $100 million, all in stock. (link, link)

June: Armstrong expresses sadness after George Floyd, 46, dies while in police custody in Minneapolis but receives internal backlash for refusing to publicly say “Black Lives Matter” in the wake of nationwide protests. Employees staged a walkout over the issue and Armstrong later tweets “black lives matter'' through his personal handle, spelling the phrase lowercase to avoid endorsing the protest movement. This tweet is later deleted along with all of Armstrong’s tweets before Oct. 12, 2020. (link and link)

June 5: Coinbase begins to sell blockchain analysis software to U.S. government agencies. (link)

Aug. 12: Coinbase announces it will allow U.S. retail customers to borrow fiat loans against as much as 30% of their bitcoin holdings. (link)

Aug. 31: Coinbase adds a16z’s Marc Andreessen as board observer, replacing Chris Dixon. (link)

Sept. 27: Armstrong further rattles some employees by declaring that Coinbase will have an apolitical culture. (link)

Sept. 28: Coinbase offers a severance package for employees who are not satisfied with the company’s apolitical stance. (link)

Oct. 8: Coinbase loses 5% of its staff to the severance package offer. (link)

Oct. 28: Coinbase announces it will launch its Visa debit card in early 2021. (link)

Dec. 1: Coinbase reveals that it facilitated MicroStrategy’s $425 million bitcoin buy earlier in 2020. (link)

Dec. 17: Coinbase files preliminary documents (Form S-1) with the U.S. Securities and Exchange Commission (SEC) indicating that it plans to go public. (link)

Dec. 18: The company reportedly picks Goldman Sachs to lead its direct listing. (link)

Dec. 29: The New York Times reports that in 2018 Coinbase paid women at the company an average of 8% less than men and paid Black employees 7% less than employees in similar roles. (link)

Jan. 7: Coinbase acquires trade execution startup Routefire. (link)

Jan. 19: Coinbase buys blockchain infrastructure startup Bison Trails. (link)

Jan. 25: CoinDesk reports that university endowments that backed blockchain VCs in 2018 have been buying crypto directly from Coinbase for a year. (link) 

Jan. 28: Coinbase confirms that it intends to become a public company through a direct listing. (link)

Feb. 17: The Block reports that Tesla used Coinbase’s institutional trading wing to make its $1.5 billion bitcoin investment. (link)

Feb. 17: Coinbase hires former Stripe executive Melissa Strait to head compliance. (link)

Feb. 19: Coinbase is valued over $100 billion in the private market. (link)

Feb. 25: Coinbase’s Form S-1 becomes effective with the U.S. Securities and Exchange Commission (SEC), clearing the company to proceed with its listing. (link)

Coinbase reveals that Armstrong was paid $60 million in 2020. (link)

Coinbase cites the potential unmasking of Bitcoin’s mysterious creator among its business risks in the prospectus. (link)

The Form S-1 reveals that Coinbase had diversified away from its primarily retail-driven market. Retail customers represented just 36% of trading volumes during the fourth quarter, down from 80% in early 2018. (link)

The firm calls out Binance as one of the exchanges that operates in the U.S. with “varying degrees of regulatory adherence.” (link)

The exchange cautions in the S-1 that U.S. regulators may inhibit its ability to compete with rivals in decentralized finance (DeFi). (link)

The S-1 also reveals that in 2014 Coinbase gave Silicon Valley Bank (SVB) stock warrants as part of an agreement allowing Coinbase to send and receive U.S. dollars through the banking system. (link)

In a blog post, Coinbase reveals that it has held bitcoin on its balance sheet since 2012. (link)

Feb. 27: Coinbase receives a $77 billion valuation in private markets. (link)

Armstrong’s net worth is reportedly valued between $7 billion and $15 billion. (link)

March 3: Coinbase submits disclosures to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) admitting that its services may have been used to circumvent U.S. sanctions. (link)

March 17: Coinbase registers 114.9 million shares for public listing. (link)

March 19: Coinbase pays the Commodity Futures Trading Commission (CFTC) $6.5 million to settle claims by the regulator that it reported misleading information about trading volumes. (link)

March 20: Coinbase’s delays the listing to April. (link)

March 24: Coinbase announces it will open offices in India even as a potential crypto ban looms in the world’s second-most populous country. (link)

March 30: Coinbase hires former SEC official Brett Redfearn to be the vice president of its capital markets division. (link)

April 1: Coinbase announces its stock will begin trading on the Nasdaq on April 14 under the ticker symbol COIN. (link)

Coinbase hires Morgan Stanley’s global anti-money laundering counsel to head up its enterprise compliance team. (link)

April 5: SEC documents reveal Paul Tudor Jones’ $44.5 billion Tudor Investment Corporation has a custodial relationship with Coinbase and Bakkt. (link)

April 6: Coinbase reports a ninefold increase in revenue in the first quarter of 2021, raking in $1.8 billion. The firm more than doubled its monthly transacting users from 2.8 million to 6.1 million. (link)

April 7: Investment bank DA Davidson raises its share price target for Coinbase shares to $440 from $195. (link)

April 9: Coinbase receives valuation estimates from $19 billion to $230 billion, highlighting analysts’ uncertainty about the future of bitcoin and crypto broadly. (link)

Documents unearthed by CoinDesk reveal that billionaire investor Daniel Loeb’s Third Point LLC holds cryptocurrency from five of its funds with Coinbase Custody. (link)

April 12: Bitcoin, ether hit new all-time highs ahead of the direct listing. (link)