CoinShares, a prominent crypto asset manager, has recently released its financial results for the second quarter of 2024. Despite facing challenges such as the FlowBank bankruptcy, CoinShares reported impressive revenue growth, showcasing the resilience and strength of its core business operations.
Revenue Surge Amid Challenges
The combined revenue, gains, and other income for the quarter reached £37.6 million ($47.9 million), marking a significant uptick from £18.9 million ($24 million) in Q2 2023. This growth underscores the robust performance of CoinShares’ primary business activities, even though it was partially offset by the financial repercussions of the FlowBank insolvency.
On June 13, CoinShares received notification from the Swiss Financial Market Supervisory Authority (FINMA) regarding the initiation of bankruptcy proceedings against FlowBank, a key investment of CoinShares. This development resulted in a substantial financial setback for the company.
Having acquired an additional 20.8% stake in FlowBank in 2022, CoinShares was heavily impacted by the bankruptcy, leading to a charge of £21.8 million ($27.8 million) as the firm chose to fully impair its investment in FlowBank on June 22. Despite this setback, CoinShares reassured stakeholders that the impairment would not affect its operations, products, or client services.
FTX Claim Sale Aids Recovery
Following the successful sale of its claim against FTX, a crypto exchange that declared bankruptcy in late 2022, CoinShares saw a major recovery. The sale of this claim, completed on June 24, 2024, contributed $36 million to CoinShares’ bottom line, demonstrating a recovery rate of 116% net of broker fees. This transaction helped mitigate the impact of other financial challenges faced by the company.
Strong Growth in crypto ETPs
CoinShares’ asset management segment witnessed significant growth in fees from Exchange Traded Products (ETPs) and index operations, reaching £22.4 million ($27.7 million) in Q2 2024. This marked increase from £10.6 million ($13.5 million) in Q2 2023 highlights the expanding demand for CoinShares’ investment products and its ability to capture market share in the digital asset space.
CEO Reflects on Eventful Quarter
Jean-Marie Mognetti, the CEO of CoinShares, described the second quarter as eventful, noting various positive developments within the company’s expanding asset management business. Mognetti highlighted the successful sale of the FTX claim in the Capital Markets division and a substantial impairment within the Principal Investments portfolio as key events of the quarter.
Overall, CoinShares’ resilience and adaptability in the face of challenges like the FlowBank bankruptcy showcase the company’s commitment to navigating the ever-evolving landscape of the crypto market. With strategic decisions and a focus on growth, CoinShares continues to solidify its position as a leading player in the digital asset management space.
