Coinbase reveals healthy revenue growth, profit in listing application with SEC

[MIAMI] Coinbase Global on Thursday disclosed its regulatory filing to go public, revealing surging revenue growth and healthy earnings and setting the stage for a landmark stock market listing for the US cryptocurrency exchange.

The procedural step of making its filing with US 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.

Coinbase said in December that it had confidentially applied with the US Securities and Exchange Commission (SEC) to go public.

Reuters was first to report last July that Coinbase started plans for a stock-market listing and was exploring going public through a direct listing instead of a traditional initial public offering.

Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.

The landmark decision from the SEC could be a major boon or blow to the legitimacy of cryptocurrencies, and determine which ones are allowed to trade on the platform.

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In its latest filing, Coinbase cautioned that it was yet to receive the relevant approvals from regulators that would allow it to trade certain securities.

"Although we have applied to operate an ATS (alternative trading system) in the United States that would allow us to trade crypto assets that are deemed "securities" under US federal securities laws, we have not yet received regulatory approval to, and do not currently, operate an ATS for trading of crypto assets deemed to be securities," Coinbase said in its filing.

The listing would come after the price of bitcoin, the world's biggest cryptocurrency, ended 2020 up more than 300 per cent and earlier this month hit a record high of US$58,354 with a market capitalisation above US$1 trillion.

Bitcoin has come off its recent highs this week as investors grew nervous at sky-high valuations.

For the year ended Dec 31, Coinbase pulled in total revenue of US$1.3 billion, compared with US$533.7 million in the year-ago period. It also reported net income of US$322.3 million, compared with a loss of US$30.4 million during the same period last year, according to the filing.

Coinbase is eschewing a traditional initial public offering where a company raises money by selling new shares, opting instead to go public through a direct listing where no new stock is sold and existing shareholders can sell stock.

Founded in 2012, San Francisco-based Coinbase is among the most well-known cryptocurrency platforms globally and has more than 43 million users in more than 100 countries.

The New York Stock Exchange, BBVA and former Citigroup chief executive Vikram Pandit are among those that have invested in Coinbase, which was valued at more than US$8 billion in its latest private fundraising round in 2018.

REUTERS