INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The components of income (loss) before income taxes were as follows:

	Year Ended December 31,
(in millions)	2020		2021		2022
Domestic	$	14	$	(3,687)	$	(1,028)
Foreign	(1)		2		1
Income (loss) before income taxes	$	13	$	(3,685)	$	(1,027)

Schedule of Income Tax Provision (Benefit)

The components of the provision for (benefit from) income taxes were as follows:

	Year Ended December 31,
(in millions)	2020		2021		2022
Current:
Federal	$	3	$	—	$	—
State	4		5		1
Foreign	—		—		—
Total current tax expense (benefit)	7		5		1
Deferred:
Federal	—		(1)		—
State	—		(2)		—
Foreign	(1)		—		—
Total deferred tax expense (benefit)	(1)		(3)		—
Total provision for (benefit from) income taxes	$	6	$	2	$	1

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of statutory federal income tax rate and our effective income tax rate was as follows (in percentages):

	Year Ended December 31,
	2020		2021		2022
Federal tax benefit at statutory rate	21.0	%	21.0	%	21.0	%
State tax benefit, net of federal benefit	(6.2)	%	3.6	%	1.8	%
Foreign rate differential	—	%	—	%	—	%
Share-based compensation	(19.2)	%	(0.5)	%	(12.3)	%
Tender offer compensation	26.1	%	—	%	—	%
Research and development credits	(75.8)	%	1.3	%	3.6	%
Non-deductible regulatory settlements	—	%	(11.7)	%	(0.3)	%
Non-deductible change in convertible notes and warrant	151.8	%	(0.3)	%	—	%
Permanent differences	3.8	%	—	%	(0.1)	%
Other	0.4	%	—	%	0.1	%
Change in valuation allowance	(55.8)	%	(13.5)	%	(13.9)	%
Total provision for (benefit from) income taxes	46.1	%	(0.1)	%	(0.1)	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities consisted of the following:

	Year Ended December 31,
	2021		2022
Deferred tax assets:
User cryptocurrencies safeguarding obligation	$	—	$	2,167
Net operating loss carryforwards	251		266
Tax credit carryforwards	81		134
Share-based compensation	135		85
Research and Experimentation expenditure amortization	—		83
Lease liability	40		38
Accruals and other liabilities	24		21
Other	22		15
Total deferred tax assets	$	553	$	2,809
Deferred tax liabilities:
Asset related to user cryptocurrencies safeguarding obligation	$	—	$	(2,167)
Right of use assets	(34)		(24)
Depreciation and amortization	(23)		(10)
Total deferred tax liabilities	(57)		(2,201)
Valuation Allowance	(495)		(607)
Net deferred tax assets	$	1	$	1

Summary of Valuation Allowance

The reconciliation of the beginning and ending amount of the deferred tax asset valuation allowance was as follows:

	Year ended December 31,
(in millions)	2020		2021		2022
Balance at beginning of period	$	35	$	27	$	495
Charged/(credited) to net income	(8)		471		112
Charges utilized/(write-offs)	—		(3)		—
Balance at end of period	$	27	$	495	$	607

Schedule of Unrecognized Tax Benefits Roll Forward

The reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows (in millions):

	Year Ended December 31,
	2021		2022
Unrecognized benefit - beginning of period	$	7	$	46
Gross increases - current year tax positions	38		16
Gross increases - prior year tax positions	1		—
Gross decrease - prior year tax positions	—		(4)
Unrecognized benefit - end of period	$	46	$	58