Coinbase Global (COIN), the nation’s largest cryptocurrency exchange, posted its seventh consecutive quarterly loss amid declines in trading volume and the number of people trading on its platform.

Investors pushed the company’s shares down 5 per cent in over-the-counter trading after a nearly 9 per cent rise during regular trading hours on Thursday.

However, the $2 million loss in the third quarter beat Wall Street’s expectations. It’s also the closest Coinbase has come to a positive earnings result since the fourth quarter of 2021, when the crypto boom was still raging.

Coinbase is still in the midst of a legal battle with the U.S. Securities and Exchange Commission, which sued the exchange in June for allegedly operating as an unlicensed cryptocurrency exchange, broker and clearing agency, jeopardising its future earnings.

The company has decided to defend itself in court, with its CEO Brian Armstrong openly stating his disagreement with the Securities and Exchange Commission. Oral arguments will be heard on 17 January in a Manhattan courtroom.

The company has also been actively lobbying Washington for more clarity on cryptocurrency regulation.

Despite the legal and regulatory challenges, Coinbase stock is up 128% YTD.

Coinbase shares have benefited from a year of gains in bitcoin and other digital assets amid speculation that the U.S. Securities and Exchange Commission may authorise the creation of spot bitcoin ETFs that would allow investors to generate returns from the cryptocurrency without having to own it.

That rally ignited in October, bringing the bitcoin price to its highest point in a year and a half. But that came well after the end of the third quarter.

In the third quarter, the number of monthly transactions on the Coinbase platform fell below levels not seen since the first quarter of 2021.

Coinbase’s third-quarter trading volume was also down more than 17% from the previous quarter and 52% from a year ago.

Coinbase’s transaction revenue fell to $288 million, down 21 per cent from a year ago and the lowest quarterly result for the trading platform in two years. The number of users making transactions per month also fell to 6.7 million, down 21% from the second quarter of last year and down 8.2% from the previous quarter.

Subscriptions and services revenue rose to $334 million, up 59% from the second quarter of last year, driven by stablecoin and interest income from Coinbase.

The company’s net revenue rose 5.5 per cent year-on-year, which was not as much as analysts expected.

Meanwhile, operating expenses fell 4 per cent from the previous quarter and 32 per cent from a year ago to $754 million as a result of a “shift in the timing of certain sales and marketing and legal expenses”.