Coinbase: A History of America's Largest Cryptocurrency Exchange

Brian Armstrong, a former Airbnb engineer, founded Coinbase after enrolling in the Y Combinator startup incubator program and receiving a USD 150,000 cash infusion. Fred Ehrsam, a former Goldman Sachs trader, joined as co-founder after discovering Armstrong's posts on Reddit. The company was named after coinbase transactions in proof-of-work blockchains.

Coinbase launched its core service allowing users to buy and sell Bitcoin through bank transfers. The platform simplified cryptocurrency acquisition for mainstream users, offering a user-friendly interface that contrasted with the complexity of earlier exchanges. This launch marked the beginning of Coinbase's mission to create an open financial system.

Coinbase received the BitLicense from the New York State Department of Financial Services (DFS), allowing it to operate a virtual currency exchange in New York. The license was one of the first granted to a major cryptocurrency exchange and demonstrated Coinbase's commitment to regulatory compliance.

Coinbase, along with Circle and Bitmain, formed the Centre consortium and launched USD Coin (USDC), a dollar-pegged stablecoin. USDC was designed as a regulated, fully reserved digital dollar and would grow to become the second-largest stablecoin by market capitalization, challenging Tether's dominance.

Coinbase became a public company on the Nasdaq exchange through a direct stock listing under the ticker COIN. Nasdaq set a reference price of USD 250 per share, giving the company an estimated value of USD 47 billion. On its first trading day, Coinbase closed at USD 328.28 per share, marking a landmark moment for the cryptocurrency industry.

The U.S. Securities and Exchange Commission reportedly threatened to sue Coinbase if the company launched a cryptocurrency lending product called Lend. Coinbase initially expressed confusion about being singled out but later canceled the planned launch, highlighting the regulatory uncertainty facing crypto companies in the United States.

Coinbase launched Base, its own layer-2 blockchain built on the Ethereum network using the OP Stack from Optimism. Base was designed as a low-cost, high-throughput platform for decentralized applications, with Coinbase emphasizing its commitment to decentralization and open-source development.

The U.S. Securities and Exchange Commission sued Coinbase, alleging that the company had been acting as an unregistered broker, exchange, and clearing agency since 2019. The SEC also alleged that Coinbase's staking service violated securities laws. Coinbase vigorously defended itself, arguing that existing securities laws did not clearly apply to cryptocurrencies.

A federal court partially granted Coinbase's motion for judgment on the pleadings, narrowing the scope of the SEC's lawsuit. The ruling was seen as a partial victory for Coinbase, though the core allegations regarding unregistered exchange operations proceeded to litigation.

Following the election of Donald Trump, the SEC dismissed its lawsuit against Coinbase, ending a nearly two-year legal battle. The dismissal marked a major victory for Coinbase and the broader crypto industry, removing significant regulatory overhang and allowing the company to pursue its business strategy without the threat of SEC enforcement.

Coinbase announced the acquisition of Deribit, a Dubai-based cryptocurrency derivatives exchange, for USD 700 million in cash and USD 2.2 billion worth of Coinbase stock. The acquisition significantly expanded Coinbase's derivatives trading capabilities and international presence in the institutional crypto market.

Coinbase was added to the S&P 500 index, the benchmark U.S. stock market index, reflecting the company's market capitalization of over USD 50 billion. Inclusion in the S&P 500 required Coinbase to meet strict financial and liquidity criteria, and it marked the first time a pure-play cryptocurrency company was added to the index.

On August 26, 2026, Coinbase and Better Mortgage announced the general availability of Bitcoin-backed mortgage products, marking the first integration of crypto assets into the traditional US qualified mortgage system. The product, available to Coinbase One members, allows borrowers to use Bitcoin as collateral for conforming home loans. Per published reporting, the program requires approximately 250% collateralization. Better Mortgage operates as a licensed US mortgage lender and the partnership represents Coinbase's expansion into real-world financial services tied to crypto holdings.

On September 28, 2026, the Commodity Futures Trading Commission registered Coinbase Clearing LLC as a derivatives clearing organization by Commission order, permitting it to clear fully collateralized futures, options on futures, and swaps. Paired with its existing futures commission merchant and designated contract market, the license completes Coinbase's in-house US derivatives stack and lets the exchange clear its own derivatives trades; Coinbase describes the venue as a USDC-native, always-on clearinghouse.