CoinShares loses £23.5M in 2022, confirms $31M exposure to FTX

abdelaziz Fathi

European cryptocurrency investment firm CoinShares posted fourth-quarter earnings that showed a marked downturn when compared with the third quarter.

CoinShares

Europe’s largest crypto asset manager said combined revenue, gains and other income was reported at £14.5 million, down 29 percent from Q3 2021’s £20.4 million. Additionally, the figure was down by 65 percent when weighed against £41.9 million in the comparable period of 2021.

Taking a full-year perspective, revenue for 2022 was reported at £51.5 million, down by 31 percent from £80.8 million the previous year.

Adjusted EBITDA for the Q4 saw an even bleaker performance, having dropped to a loss of £23.5 million compared to a profit of £32.1 million in 2021. The group’s full year EBITDA also slipped into a negative territory at -£6.5 million compared to a core profit of £121.1 million a year earlier.

CoinShares also confirms its previously-announced exposure to the bankrupt crypto exchange FTX, which was reported at roughly $31 million. Despite this, CoinShares CEO Jean Marie Mognetti said the losses indicate a “limited exposure,” and the firm is still in a state of “robust financial health.” He added that they had materially reduced exposure to FTX ahead of the exchange’s decision to freeze further withdrawals.

“The entire digital asset sector negatively impacted by the unexpected insolvency of FTX and the revelations of widespread fraud that continue in the wake of this unexpected event. Like many others, we did not circumvent FTX’s bankruptcy unscathed. At the time FTX halted withdrawals from its exchange, £26 million of our assets remained there and following FTX’s declaration of bankruptcy it is entirely uncertain when or how much, if any, we will be able to recover,” the statement reads.

CoinShares’ earnings call highlighted the recent shift of the trading venue for the company’s shares from Nasdaq First North Growth Market to Nasdaq Stockholm’s main market.

CoinShares said the move provides investors with new ways to gain exposure to the digital asset class. The approval was conditional upon customary conditions being fulfilled, including liquidity requirements and registration with the Swedish Financial Supervisory Authority.

Trading on the most senior marketplace in Sweden is said to enhance CoinShares’ regulatory profile and credibility as it increases awareness among analysts, prospective investors and the media. It also facilitates investments from institutional players who may be restricted to invest in companies listed on a MTF.

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