Coinbase Global, Inc., branded as Coinbase, is a publicly traded American company that operates a cryptocurrency exchange platform. Coinbase is a distributed company, with all employees operating remotely, and it lacks a physical headquarters. It is the largest cryptocurrency exchange in terms of trading volume in the United States. The company was founded by Brian Armstrong and Fred Ehrsam in 2012. In May 2020, Coinbase announced the closure of its headquarters in San Francisco, California, and transitioned to a remote-first operation, as part of a wave of major tech companies closing their San Francisco headquarters following the COVID-19 pandemic.
2012-2019: Founding and Early Years
Coinbase was founded in June 2012 by former Airbnb engineer Brian Armstrong. Armstrong participated in the Y Combinator startup incubator program and secured a $150,000 cash injection. Former Goldman Sachs trader Fred Ehrsam later joined as a co-founder. British programmer and co-founder of Blockchain.info, Ben Reeves, was initially part of the Coinbase founding team but parted ways with Armstrong before the Y Combinator funding round due to differing views on how the Coinbase wallet should operate. The company was named Coinbase after the concept of a "coinbase transaction," which is a special transaction that introduces new cryptocurrency into circulation in proof-of-work cryptocurrencies. In October 2012, the company launched its service allowing buying and selling of Bitcoin via bank transfers.
In May 2013, the company secured a $5 million Series A investment led by Union Square Ventures, led by Fred Wilson. In December of the same year, Coinbase received a $25 million investment from venture capital firms Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital. Olaf Carlson-Wee, a graduate of Vassar College, was hired as the company's first employee.
In 2014, the company grew to 1 million users and made acquisitions of blockchain explorer service Blockr and web bookmarking company Kippt. They also purchased insurance for the value of Bitcoin stored on their servers and introduced a secure storage system called the Vault for storing Bitcoin. Throughout 2014, the company also collaborated with Overstock, Dell, Expedia, Dish Network, and Time Inc. They also added Bitcoin payment processing capabilities for traditional payment companies Stripe, Braintree, and PayPal. In January 2014, Coinbase Global, Inc. was established in Delaware as a holding company for Coinbase and its subsidiaries. The restructuring of Coinbase as a subsidiary of Coinbase Global was completed in April of the same year.
In January 2015, the company received a $75 million investment led by Draper Fisher Jurvetson, the New York Stock Exchange, USAA, and several banks. In late January, the company launched Coinbase Exchange, a Bitcoin exchange based in the United States, catering to professional traders. In September, Coinbase started offering its services in Canada and Singapore.
In May 2016, the company rebranded its Coinbase Exchange to Global Digital Asset Exchange (GDAX). In July, they added retail support for Ethereum. Also in July, they announced that they would be ceasing operations in August following the closure of Canadian online payment service provider Vogogo.
In January and March 2017, Coinbase obtained the BitLicense from the New York State Department of Financial Services (DFS) and obtained licenses for trading Ethereum and Litecoin. In November, Coinbase was ordered by the U.S. Internal Revenue Service to report users who conducted transactions of at least $20,000 in a year. On December 19th, Coinbase listed Bitcoin Cash, leading to an investigation into insider trading due to unusual price movements on the Coinbase platform.
On February 23, 2018, Coinbase informed approximately 13,000 affected customers that the company would be providing their taxpayer identification, name, date of birth, address, and historical transaction records from 2013 to 2015 to the U.S. Internal Revenue Service within 21 days. In March, Coinbase appointed Emilie Choi, former executive at LinkedIn, as Vice President of Corporate and Business Development. In May 2019, she was promoted to President and Chief Operating Officer. On March 26, 2018, Coinbase announced their intention to support ERC-20 tokens. On April 5, 2018, Coinbase announced the establishment of Coinbase Ventures, an early-stage venture fund focused on investing in blockchain and cryptocurrency-related companies. On May 16, Coinbase Ventures announced its first investment in Compound Labs, a startup that builds Ethereum smart contracts for a money market-like protocol.