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Coinbase Reports 63 Percent Drop in Revenue Amid Industry Slump

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When the cryptocurrency exchange Coinbase went public in April 2021, it was a triumphant moment for the nascent crypto industry.

But the company has endured a grim 2022, grappling with a crypto market crash that has tanked its stock price and forced it to lay off hundreds of employees.

Those struggles continued on Tuesday when Coinbase reported a 63 percent decline in revenue in the second quarter and swung to a $1.1 billion loss from a year ago.

Blaming the “fast and furious” crypto downturn, the company said revenue was $808 million, down from $2.2 billion a year earlier. Its monthly customer total rose to nine million from 8.8 million last year, but was down from 9.2 million in the last quarter. Coinbase also predicted that its user numbers would continue to fall over the next three months.

In an earnings call on Tuesday, Brian Armstrong, Coinbase’s chief executive, emphasized the cyclical nature of crypto and pointed out that the company had survived previous downturns.

“It seems scary,” he said. “But it’s never as bad as it seems.”

The results illustrated the stark challenges facing Coinbase at a turbulent moment for the crypto industry. The prices of the leading digital currencies crashed in May and June as a series of experimental crypto ventures collapsed, plunging investors into financial ruin. The crash has led to layoffs across the industry, dampening the excitement that surged last fall when the price of Bitcoin reached a record high.

As part of the industry meltdown, Coinbase’s stock price has fallen about 75 percent since November. The company’s success is largely tied to the fluctuations of the broader crypto market. In the second quarter, more than 80 percent of its revenue came from trading fees it charged customers to buy and sell digital assets like Bitcoin and Ether.

In June, Coinbase laid off 18 percent of its staff, or about 1,100 employees. Mr. Armstrong said at the time that the company had “over-hired.”

Coinbase’s recent struggles have fueled concerns that it may be squandering its early lead in the industry, as competitors like Binance and FTX expand during the downturn.

Despite its early start, Coinbase has never had a strong foothold in the international market, and it recently botched an expansion effort in India. Its most hyped product launch of the year — a marketplace for the digital collectibles known as nonfungible tokens, or NFTs — drew little customer interest. And a hiring spree last year led to overspending and bloat, as the company’s expenses more than doubled.

“We probably could have grown slower over the last couple of years,” Mr. Armstrong said on the call.

Coinbase has also come under regulatory scrutiny. Last month, the Justice Department filed insider-trading charges against a former Coinbase employee. In a related action, the Securities and Exchange Commission said that it considered some of the digital coins listed on Coinbase’s exchange to be securities and, therefore, subject to regulation like stocks or bonds — a stance the company has objected to.

In a letter to shareholders on Tuesday, Coinbase said that the S.E.C. sent the company a “voluntary request for information” in May about that listing process. “We do not yet know if this inquiry will become a formal investigation,” the letter said.

Coinbase’s competitors appear to be faring better during the downturn. FTX, another crypto exchange, has had financial results that are “ballpark similar” to last year’s, according to its chief executive, Sam Bankman-Fried. Binance, the world’s largest exchange, announced in June that it was looking to fill 2,000 positions.

Still, Coinbase remains one of the most trusted and recognized crypto brands in the United States, known for its Super Bowl commercial featuring a bouncing QR code. Last week, the company announced a partnership with BlackRock, the world’s largest asset manager, to help institutional investors trade Bitcoin.



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ElonJet is (sort of) back on Twitter

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The college student who ran the now-banned @ElonJet Twitter account that used public information to track Elon Musk’s private jet has resumed his activities on Twitter under a new username. As noted by Insider, Jack Sweeney, 20, has created a new account called @ElonJetNextDay — which now tracks Musk’s private jet with a 24-hour delay to circumvent Twitter policy restrictions.

Sweeney’s original ElonJet account was suspended from the platform last week following accusations from Musk that it violated Twitter rules by revealing his live location. Twitter updated its policy to forbid publishing a person’s real-time location on the same day it suspended ElonJet. Sweeney said in an interview with Insider that he will be “posting manually” for now while he works on the framework to fully automate the account.

Musk tweeted on December 15th that “Posting locations someone traveled to on a slightly delayed basis isn’t a safety problem, so is ok.” Twitter also explicitly states that “sharing publicly available location information after a reasonable time has elapsed, so that the individual is no longer at risk for physical harm” is not a violation of platform rules. Elsewhere in the policy, it notes that its definition of “live” location data means someone’s real-time or same-day whereabouts.

Most commercial and private aircraft are equipped with Automatic Dependent Surveillance-Broadcast technology (ADS-B) that transmits a unique code (tied to the airplane’s tail number) containing information such as altitude and GPS location. This information is publicly available and aircraft flying in the USA and Europe are required to broadcast it in order to prevent midair collisions.

In a statement back in November, Musk said he would not ban the original ElonJet account as part of his “commitment to free speech” despite claiming it was a “direct personal safety risk.” The automated ElonJet account posted publicly available information regarding the location of Musk’s 2015 Gulfstream G650ER, and had amassed over 540,000 followers before it was permanently banned on December 14th. Musk previously offered Sweeney $5,000 to have the account taken down.



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She Worked for Twitter. Then She Tweeted at Elon Musk.

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Early in November, Twitter’s roughly 7,500 employees received a terse email from a generic address: “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global work force.” The note was signed “Twitter.” On Nov. 3, some people at the company received emails indicating they would be laid off the next day.

That night, Ms. Solomon, her husband and a few colleagues headed to Dots Cafe Portland, a lounge on Clinton Street. Phones were on the table, face up, she said. As the work friends talked, they tapped away at their phones, taking part in chats on the Signal app with colleagues in London, Seattle and San Francisco. Messages like “I got hit” were flying across screens, Ms. Solomon recalled. “You were seeing your co-workers drop like flies,” she said.

By the next afternoon her team of about 10 engineers was reduced to four. Ms. Solomon and her husband had survived the round of layoffs. The next week, she recalled, she awaited further direction from Mr. Musk or the new executive team. Nothing came, she said, except for an email alerting employees that remote work would no longer be permitted, with few exceptions.

Many employees learned of Mr. Musk’s priorities by watching his Twitter feed, where he posted frequently about company business to his more than 100 million followers. On Nov. 5, he complained about the platform’s search function: “Search within Twitter reminds me of Infoseek in ’98! That will also get a lot better pronto,” he wrote. That same day, he tweeted: “Twitter will soon add ability to attach long-form text to tweets, ending absurdity of notepad screenshots.”

That was more than Ms. Solomon and many of her colleagues had heard internally. “Radio silence,” she said. She began to vent her frustration on Twitter.

One of her first tweets in this vein came on Nov. 6, shortly after Mr. Musk announced a new rule for Twitter users in a tweet: “Any name change at all will cause temporary loss of verified checkmark,” he wrote. He had posted that message after many people on Twitter had changed their names to variations on Mr. Musk’s name, most of them mocking.



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The new iOS 16.2 Home app architecture upgrade has disappeared

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Apple has removed the option to upgrade to the new HomeKit architecture on devices running iOS 16.2. The change follows multiple reports of issues and problems with the Home app after the upgrade was installed.

Apple spokesperson Emily Ewing confirmed the change in a statement provided to The Verge:

“We are aware of an issue that may impact the ability for users to share the Home within the Home app. A fix will be available soon. In the meantime, we’ve temporarily removed the option to upgrade to the new Home architecture. Users who have already upgraded will not be impacted.“

The new Home app architecture was one of the key features of iOS 16.2, with Apple claiming that the upgrade would be “more reliable and efficient.” MacRumors first discovered this week that the Home app in iOS 16.2 no longer offers the option to upgrade to the new architecture within the Home app settings. Several reporters at The Verge have also confirmed that the upgrade option is unavailable on their devices.

The new architecture was first introduced in the iOS 16.2 beta back in October as an optional upgrade before the iOS 16.2 public release on December 13th. Both the beta and public release required Apple devices logged into iCloud to be running the latest versions of iOS, macOS, and tvOS. The upgrade does not happen automatically when iOS 16.2 is installed on a phone, instead requiring a manual process through the Home app.

The update has caused issues with missing devices and adding multiple users for some

Reddit users who downloaded the optional upgrade prior to its removal have reported issues such as the app booting other members from a Home account and being unable to re-add them. Users on the MacRumors forum have reported being unable to invite users to share the Home, HomeKit‌ devices being stuck displaying an “updating” status, and some accessories vanishing from the Home app entirely. Users who have already upgraded are unable to revert to the previous version of the app.

Update, December 23rd, 2022, 2:15PM ET: Added confirmation and statement from Apple spokesperson. Added links to Apple’s updated support pages.

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