The U.S-based cryptocurrency exchange, Coinbase, is reportedly getting ready to go public, a move that would make it the first exchange to do so in the United States.
Coinbase Set to Go Public
Coinbase, one of the top virtual currency trading platforms in the world, is planning on listing its shares on the stock market. The San Francisco-based company might be looking to make a move this year, according to a report by Reuters.
The report by Reuters cited three people familiar with the matter. If the move goes through, Coinbase will become the first cryptocurrency exchange in the United States to go public. This move might boost people’s confidence in cryptocurrencies and attract more investors to the sector.
For Coinbase to go public, it will need the approval of the U.S. Securities and Exchange Commission’s (SEC). If the regulatory entity greenlights the move, it will be a big win for cryptocurrency advocates as they seek more ways for the crypto market to go mainstream.
According to the report, Coinbase could start making moves for the listing later this year or early 2022. The sources, however, cautioned that the plans might be subject to change as nothing has been made public yet. Coinbase is yet to make its intentions known with the SEC or any other regulatory body. However, the company is currently working on hiring investment banks and law firms, the sources added.
The sources close to the matter, however, requested anonymity since the listing preparations are confidential at the moment. When approached, a spokesman for Coinbase stated that the company does not comment on speculations and rumors. The SEC also refused to comment on this latest development.
The U.S SEC has previously maintained that some cryptocurrencies could be considered as securities. As such, they need to be regulated. However, the regulatory agency is yet to come up with specific guidance on cryptocurrencies. Most virtual currencies have been battling to win legitimacy among mainstream investors. At the same time, the general public remains cautious about the speculative nature of these coins and other vices, such as money laundering.
Coinbase Valued at $8 Billion
In the last private fundraising round of Coinbase in 2018, the company was valued at over $8 billion. One of the sources stated that Coinbase is considering going public through a direct listing rather than a traditional initial public offering (IPO).
When listed directly, a company does not sell new shares as it would do during an IPO. Also, the existing investors will not be required to abide by lock-up restrictions regarding when they can sell their holdings after the market launch.
Coinbase, which has been around since 2012, has been one of the most popular crypto trading platforms in the world. It has a global customer base of 35 million, with its users trading various cryptocurrencies like Ethereum, Bitcoin, and XRP.
The company has received substantial investment from entities such as BBVA, the New York Stock Exchange, and the former CEO of Citigroup Inc., Vikram Pandit. Coinbase was one of the biggest winners of the Bitcoin boom in 2017, which saw the price of the crypto surge from roughly $1,000 to nearly $20,000. At the moment, the leading virtual currency is trading just above the $9,200 mark.
Earlier this week, Coinbase announced that it had hired the deputy general counsel of Facebook, Paul Grewal, who will serve as the chief legal officer of the company.