PREPAID EXPENSES AND OTHER ASSETS

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid expenses and other current assets, and other non-current assets consisted of the following (in thousands):


	September 30,		December 31,
	2023		2022
Prepaid expenses and other current assets
Prepaid expenses	$	88,101	$	98,204
Assets pledged as collateral(1)	50,081		100,007
Other	19,532		18,837
Total prepaid expenses and other current assets	$	157,714	$	217,048

Other non-current assets
Strategic investments	$	357,075	$	326,683
Deferred tax assets	1,105,992		1,046,791
Deposits	12,238		10,989
Other	2,791		17,257
Total other non-current assets	$	1,478,096	$	1,401,720

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(1) Includes $46.1 million and $58.4 million as of September 30, 2023 and December 31, 2022, respectively, of the right to receive a fixed amount of USDC pledged as collateral. See Note 11. Collateral for additional details on assets pledged as collateral.

Strategic investments

The Company makes strategic investments in various companies and technologies through Coinbase Ventures. Strategic investments primarily include equity investments in privately held companies without readily determinable fair values where the Company (1) holds less than 20% ownership in the entity, and (2) does not exercise significant influence, and accordingly, these investments are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer (referred to as the measurement alternative) and impairment. The changes in the carrying value of strategic investments accounted for under the measurement alternative are presented below (in thousands):


	Nine Months Ended September 30,
	2023		2022
Carrying amount, beginning of period	$	315,285	$	352,431
Net additions(1)	54,271		57,058
Upward adjustments	62		879
Previously held interest in ORDAM (see Note 4)	(20,000)		—
Impairments and downward adjustments	(5,774)		(70,631)

Carrying amount, end of period(2)	$	343,844	$	339,737

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(1)Net additions include additions from purchases and reductions due to exits of securities and reclassifications due to changes to capital structure.

(2)Excludes $13.2 million and $17.3 million as of September 30, 2023 and 2022, respectively, of strategic investments that are not accounted for under the measurement alternative.

Upward adjustments, impairments, and downward adjustments from remeasurement of investments are included in other (income) expense, net in the condensed consolidated statements of operations. As of September 30, 2023, cumulative upward adjustments for investments held as of that date were $4.9 million and cumulative impairments and downward adjustments were $107.8 million. As of December 31, 2022, cumulative upward adjustments for investments held as of that date were $4.9 million and cumulative impairments and downward adjustments were $102.0 million.

Equity method investments

The Company acquired a 50% interest in Centre Consortium LLC (“Centre”) during August 2019. The Company had significant influence over the entity, but did not have power or control. The investment was included in other under other non-current assets in the table within this Note. On August 18, 2023, the Company entered into a share transfer agreement to exchange its 50% interest in Centre to its joint venture partner, Circle US Holdings, Inc., for 3.5% of the fully diluted equity of Circle Internet Financial Limited at an estimated fair value of $51.1 million, which is included in strategic investments in the table within this Note. The Company recorded a gain of $49.9 million, which is included in other (income) expense, net in the condensed consolidated statement of operations for the three and nine months ended September 30, 2023. In connection with this transaction, the Centre joint venture was terminated.