Coinbase Could Enter the Initial Exchange Offering Industry
Coinbase, one of the largest and most recognized crypto exchanges in the world, could soon launch a new platform to host Initial Exchange Offerings (IEOs). This is according to the head of institutional sales for Coinbase in Asia, Kayvon Pirestani.
Coinbase May Launch An IEO Platform
During a panel at CoinDesk’s Invest: Asia, Priestani explained that they are exploring an IEO platform to help startups and firms launch their digital assets. The firm is also analyzing the possibility to also launch other capital-formation tools, including Security Token Offerings (STOs).
On the matter, Pirestani commented:
“We think there’s a really interesting opportunity there for Coinbase. In a nutshell, Coinbase is carefully exploring not only the IEO space but also STOs. But I can’t make any formal announcements right now.”
There are different exchanges in the market that have already launched IEO platforms. The most popular is the Binance Launchpad, launched by the homonymous exchange earlier this year. Several companies have already used the platform to attract investors that want to help them grow.
Other major exchanges with IEOs include Bitfinex, OKcoin and Kucoin, among others. The main difference with an Initial Coin Offering (ICO) is the fact that the IEO is supported by an exchange that acts as a trusted broker offering the token sale of a company. The exchange is in charge of controlling the token is legitimate and that the firm behind it follows KYC and AML regulations.
It may take a long time before the company decides to release this platform for IEOs. Additionally, it may take even longer for Coinbase to launch a platform for regulated securities offerings in the United States.
Coinbase has been growing as a cryptocurrency exchange in the market. It became recognized for operating for a long time and without reported incidents. Many digital currency exchanges have been affected by hacks and attacks, resulting in the loss of millions of dollars in cryptocurrencies.
In 2018, Coinbase received the regulatory approval to purchase securities firms that had broker-dealer licenses. Some of these companies included Keystone Capital Corp., Venovate Marketplace and Digital Wealth LLC.
Although Coinbase obtained these licenses, they are still trying to position themselves in a situation that would allow them to improve their presence in the space. In addition to it, Pirestani mentioned that although there are several individuals talking about STOs, the trading volume of these assets is much lower than other products.