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U.S.-based cryptocurrency exchange Coinbase is reportedly mulling going public later this year, Reuters reports, July 9, 2020.
Legitimizing the Crypto Landscape
Coinbase, one of the largest crypto exchanges in the world by reported trading volume is planning to become a publicly listed company in the U.S.
Should the U.S. financial watchdog, the Securities and Exchange Commission (SEC), approve the firm’s application, it could very well prove to be a watershed moment that legitimizes cryptocurrencies.
Three people familiar with the matter told Reuters that Coinbase could apply to go public as early as later this year, although the plans are still subject to change.
The sources added that although Coinbase has not yet approached the SEC with its initial public offering (IPO) plans, it has, however, engaged the services of investment banks and law firms to help with the process.
Taking the Direct Route
The San Francisco-headquartered crypto juggernaut, valued at $8 billion in its latest private fundraising round in 2018, is considering going public through a direct listing.
For the uninitiated, a direct listing involves existing company stakeholders selling their shares to the public instead of going down the traditional IPO path which involves issuing new shares.
The SEC giving a green light to Coinbase could be a potential inflection point for the multi-billion dollar crypto industry. Having Coinbase listed on a public stock exchange would not only exude the regulator’s confidence in the firm but also help cement cryptocurrencies as a sound asset class.
That said, one would assume Coinbase to be doing ample homework to get past the regulatory hurdles to list itself as a public firm.
To date, several entities have applied to the SEC to get a Bitcoin ETF approved albeit with little luck. The seemingly unending struggle of listing a Bitcoin ETF has, to an extent, hindered the mainstream adoption of digital assets.
Earlier this year, one of SEC’s most vocal pro-crypto Commissioners, Hester Peirce, criticized the agency’s decision to reject a Bitcoin ETF proposal filed by Wilshere Phoenix and NYSE Arca.
In similar news to that of Coinbase, crypto lending platform BlockFi recently made a job posting seeking a CFO who could lead the firm’s finance team “for late-stage investment, acquisition, and/or IPO.”