Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk to our Financial Statements associated with the effect of changes in market factors, including risks associated with interest rates, foreign currency, derivatives, equity investments, and crypto assets. These assets, liabilities, and equities are held for purposes other than trading. There have been no material changes to our market risk exposures from the information presented in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2023, except as described below.

Market price risk of crypto assets

We generate a large portion of our total revenue from transaction fees on our platform in connection with the purchase, sale, and trading of crypto assets by our customers. Transaction revenue is based on transaction fees that are either a flat fee or a percentage of the value of each transaction and may vary depending on payment type and the value of the transaction. We also generate a large portion of our total revenue from our subscription products and services and such revenue has grown over time. Accordingly, crypto asset price risk could adversely affect our operating results. In particular, our future profitability may depend upon the market price of Bitcoin and Ethereum, as well as other crypto assets. Crypto asset prices, along with our operating results, have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, Ethereum and other crypto assets has had and could in the future have an adverse effect on our

earnings, the carrying value of our crypto assets, and our future cash flows. This may also affect our liquidity and our ability to meet our ongoing obligations.

In addition to the exposures described above, we hold crypto assets for various reasons and, effective January 1, 2024, we adopted ASU 2023-08, which changed how we value crypto assets held on our Condensed Consolidated Balance Sheets as of March 31, 2024. As of March 31, 2024, we held crypto assets as follows: $1.5 billion held for investment, $150.6 million held for operations, $231.3 million which were borrowed, and $106.6 million held as collateral. See Note 2. Summary of Significant Accounting Policies of the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of these different categories of assets.

Crypto assets held for investment are primarily held as long-term holdings, and historically, we have not attempted to reduce our market risk exposure associated with these crypto assets. Crypto asset prices have been volatile, as demonstrated by the one year historical volatility of Bitcoin and Ethereum of approximately 50% implied from the annualized standard deviation of daily price returns observed in the past 24 months. A hypothetical 50% increase or decrease in crypto assets prices as of March 31, 2024 and December 31, 2023 would result in a $761.2 million and $514.0 million impact, respectively, to the value of our Crypto assets held for investment and would have, under ASU 2023-08, been reflected as a gain or loss on our Condensed Consolidated Statements of Operations.

Our market risk exposure on all remaining categories of crypto assets that we hold is limited, either due to their short-term nature or to naturally offsetting positions. Crypto assets held for operations are received as a form of payment that are converted to cash nearly immediately or used timely to fulfill corporate expenses and therefore are subject to limited market risk. Our market risk exposure on crypto assets borrowed and crypto assets held as collateral is limited through naturally offsetting positions of the crypto asset borrowings and obligation to return collateral which contain embedded derivatives that are remeasured each reporting period. A hypothetical 50% increase or decrease in crypto asset prices as of March 31, 2024 and December 31, 2023 applied to the value of these remaining crypto assets positions would not have a material impact on our Condensed Consolidated Financial Statements.

Market volatility associated with derivatives

We have exposure to derivatives measured and recorded at fair value. Market risk on derivatives is the exposure created by potential fluctuations in market prices and other factors and is a function of the type of derivative product, the volume of transactions, the tenor and terms of the agreement and the underlying volatility. In certain market conditions, we may opportunistically employ derivative strategies within a disciplined risk management framework to attempt to hedge our exposure to foreign currency or crypto assets positions that are not receivable, payable, or borrowing positions but rather direct crypto assets held for investment or operations. We did not have any such positions as of March 31, 2024 or December 31, 2023. Our remaining derivative positions, including all of those held during the periods presented, arise from our operations and reflect a strategy of largely mitigating these remaining exposures through naturally offsetting positions, regardless of whether hedge accounting is achieved.

Our market risk exposure on derivative crypto asset borrowings and obligations to return crypto asset collateral is naturally offset, at least in part, by the associated non-derivative crypto assets borrowed, crypto assets held as collateral, and crypto asset loan receivables originated with borrowed assets, all of which are recorded and held at their fair values. As of March 31, 2024 and December 31, 2023, our gross derivative exposures were liabilities of $379.4 million and $63.0 million, respectively, while our net exposures after considering the naturally offsetting non-derivative positions, were assets of $0.0 million and $0.1 million, respectively. The impact of changes in the fair values of these derivatives on our Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, were losses of $127.1 million and $0.2 million, respectively, when considered gross, or $0.0 million and $0.2 million, respectively, when considered net of the impact of the naturally offsetting non-derivative positions. The gains and losses on derivatives can be found within our Condensed Consolidated Statements of Operations in the locations shown in Note 13. Derivatives, while the impact of the naturally

offsetting non-derivative positions can be found in Transaction expense. As of March 31, 2024 and December 31, 2023, a 10% increase or decrease in the fair value of these derivative positions, after considering the associated naturally offsetting positions, would not have a material impact on our Condensed Consolidated Financial Statements.

Our market risk exposure to derivatives arising from crypto asset denominated accounts receivable and other payables denominated in crypto assets represents unmitigated exposure. However, these assets and liabilities are short-term in nature. As of March 31, 2024 and December 31, 2023, our exposures, on a gross basis as the receivables and payables may be unrelated, were $97.3 million and $65.1 million, respectively. The impact of changes in the fair values of these derivatives on our Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, were gains of $12.1 million and $5.6 million, respectively. The gains and losses on these derivatives can be found within our Condensed Consolidated Statements of Operations in the locations shown in Note 13. Derivatives. As of March 31, 2024 and December 31, 2023, a 10% increase or decrease in the fair value of these derivative positions would not have a material impact on our Condensed Consolidated Financial Statements.

For more information on our derivatives, see Notes 2. Summary of Significant Accounting Policies, 6. Collateralized Arrangements and Financing, 7. Accounts Receivable, Net, 10. Other Current and Non-Current Assets, 11. Accrued Expenses and Other Current Liabilities, and 13. Derivatives, of the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.