Today’s news indicates that Coinbase, a major digital exchange, seems set to move forward with plans to go public, although such plans hinge on approval from the U.S. Securities and Exchange Commission.
“The procedural step of making its filing with U.S. regulators public brings Coinbase a step closer to listing its shares on the Nasdaq stock exchange, which would represent a landmark victory for cryptocurrency advocates vying for mainstream endorsement,” write Joshua Franklin and Anirban Sen for Reuters. “Coinbase said in December that it had confidentially applied with the U.S. Securities and Exchange Commission (SEC) to go public.”
Franklin and Sen also report Coinbase has chosen to pursue a direct listing instead of a traditional IPO, in order to be able to list its shares on the New York Stock Exchange.
However, those who have been following the SEC’s rulings on options like a Bitcoin ETF might be forgiven for thinking that Coinbase could have an uphill climb ahead.
As Franklin and Sen also reveal, Coinbase has are ready kissed the SEC’s ring with a statement to the effect that they “do not trade cryptocurrency assets that are deemed to be securities.” Just this past week, Ripple went to court with the SEC over claims that it violated U.S. financial standards by selling unlicensed or unregistered securities. So Coinbase assumedly has to carefully show that its alternative trading system does not violate U.S. law in this way.
“While the SEC has said some cryptocurrencies may be considered securities and be subject to regulation, it has yet to issue specific guidance on most virtual coins,” writes an anonymous author at Aljazeera. “Many cryptocurrencies have struggled to win legitimacy among mainstream investors and a general public wary of their speculative nature and potential for money laundering.”
Aside from the need for SEC approval, traders are enthusiastic about the Coinbase financial background. With $1.3 billion in revenue for the past year and net income of $322 million, Coinbase is considered to have good revenue growth and earnings. The company is currently valued at around $8 billion.