What's behind Coinbase's tax expense fluctuations in 2023-2024?

Coinbase's tax expense fluctuations in 2023-2024 can be attributed to **increased regulatory scrutiny and operational changes**.

1. **Regulatory Challenges and Litigation Costs**: Coinbase faced significant regulatory challenges, including a civil enforcement action by the SEC, which was later dismissed. The company's legal fees and expenses related to these regulatory matters would have impacted its tax expense. Additionally, Coinbase's challenge against an IRS demand for customer data, which it argued was overly broad, added to its legal costs.
2. **Expansion and Operational Changes**: Coinbase's plans to re-enter the Indian market after a year-long pause involved engaging with regulators to secure necessary approvals. Such efforts to expand into new markets and comply with local regulations likely incurred additional expenses, contributing to the tax expense fluctuations.

In summary, Coinbase's tax expense fluctuations are primarily due to increased regulatory scrutiny and the associated legal fees, as well as the costs of expanding into new markets and complying with local regulations.