Crypto exchange-traded product (ETP) issuer CoinShares reported a 97% drop in income in 2022 following the collapse of the exchange FTX last November.
The firm said total comprehensive income for the year fell from £113.4m to £3m after the group was dealt a “significant blow” from the collapse of Sam Bankman-Fried’s FTX empire while rising interest rates also proved a headwind for crypto assets.
CoinShares revealed a £26m loss following the collapse of FTX while asset management fees fell 66% in Q4 2022 as assets under management (AUM) fell significantly over the year.
AUM was down 30% from £2bn at the end of Q3 to £1.4bn at the end of 2022, despite recording $17.2m net inflows over the period.
Jean-Marie Mognetti, CEO of CoinShares, said: “Following FTX’s declaration of bankruptcy, our asset recoverability remains uncertain.
“As a prudent measure, we provided against the entire balance in our Q4 financials. While the group’s financial health remained solid, providing for these amounts in full has understandably impacted our financial performance for both Q4 and 2022 as a whole.”
The group said it has amended its approach to counterparty risk following the collapse of FTX, placing the “vast majority” of all digital assets with regulated digital asset custodians.
The group also closed its FTX ETP – the CoinShares FTX Physical FTX Token (CFTT) – last November.
CoinShares also announced the closure of its consumer platform due to its “required significant upfront investment in marketing”.
The impact of FTX has been felt across the crypto ETP ecosystem.
Earlier this month, Flow Traders said it reduced its exposure to crypto platforms following the collapse.