Coinbase files for IPO

The cryptocurrency exchange submitted a confidential draft registration on Form S-1 with the securities regulator. Coinbase said the submitted document will “become effective after the SEC completes its review process, subject to market and other conditions.”

We have confidentially submitted our draft registration (Form S1) with the Securities and Exchange Commission. https://t.co/U6d0sVz0aX

— Coinbase (@coinbase) December 17, 2020

Should the listing receive the blessing of the SEC, Coinbase would become the first U.S. cryptocurrency exchange to go public.

If SEC signs off on the application, it would be a landmark endorsement for the cryptocurrency industry fighting for mainstream recognition. There are several publicly traded companies that have an interest in crypto, however, it will be a major event if a full-blown exchange is listed. 

The listing will send the kind of message to the mainstream finance world that the cryptocurrency enthusiasts are hoping for.

The submission of the initial document is only the first step in what will likely be a long road till the startup is listed on an exchange. 

Coinbase did not publicize how it plans to structure its IPO.

This is not the first time that the unicorn valued at $8 billion has been linked to a potential IPO. There were rumors in July that the exchange was planning to go public. However, at the time, the company spokesperson at the time refused to comment citing that the company does not respond to rumors or speculation.

The exchange makes its money on the commission it charges for cryptocurrency trades placed on its platform. Coinbase has products designed for professional investors. This could make the exchange more appealing to the Wall-Street-type of investors.

Impeccable timing

The filing couldn’t have come at a better time. The cryptocurrency industry is in the spotlight with bitcoin hitting a historic high of more than $23,000. At the same time, the appetite from major investors is high, leading to bullish sentiments.

On the other hand, the IPO market is currently red-hot. 

The public offering would allow the exchange’s early investors that include CEO Brian Armstong, Union Square Ventures, and private venture firm Andreessen Horowitz among others to cash out.

More about Coinbase

The exchange was founded in 2012 by ex-AirBNB engineer Armstrong and a former Goldman Sachs trader Fred Ehrsam.

After its launch in 2012, Coinbase raised $5 million in Series A funding from Fred Wilson in May. In December, Andreessen Horowitz, Union Square Ventures, and Ribbit Capital invested $25 million in the exchange.

In 2015, the startup secured $75 million in a funding round led by Draper Fisher Jurvetson, USAA, the New York Stock Exchange, and a number of banks.