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Avanti Bank & Trust founder, Caitlin Long, has stated that US-based crypto exchange Coinbase’s upcoming IPO will mark a “watershed moment” for cryptocurrency regulation.
In a discussion held earlier today with SEC commissioner Hester Peirce at the “Bitcoin in the Real World” event organised by BlockFi and Real Vision, Long predicted that the Coinbase IPO will force the Securities Exchange Commission (SEC) to establish a precedent for key regulatory issues in the digital asset sector.
The Wyoming-based digital asset bank executive further stated that the SEC will examine Coinbase’s IPO with a ‘fine-tooth comb’. “What the world is going to look at when that prospectus goes effective, is that everything that in it is OK with the SEC”, he added.
High-profile crypto exchange Coinbase announced its intentions to pursue an Initial Public Offering (IPO) on December 17, 2020. While the exchange did not reveal any details of how the exchange would structure its offering at that time, the move was hailed as a major milestone towards legitimacy for digital assets by the crypto community.
Long pointed out that the recent delisting of Ripple’s XRP token from a number of exchanges after the SEC had filed charges against the firm calling XRP an unlicensed security offering had led to extensive debate on the clarity in regulations determining the classification of digital assets within the crypto community.
The founder believes that the Coinbase IPO will play a crucial role in compelling the SEC to make firm rulings regarding any other tokens it suspects of being securities that are currently trading on Coinbase.
“To the extent that there are securities that haven’t been deemed securities yet, but they actually are, and they’re trading on the Coinbase platform […] I think that the IPO does sort of force the issue”, Long explained.
He quickly clarified that though he believes that the crypto community will receive greater clarity on key issues through the Coinbase IPO, “It’s not going to be necessarily as black and white as we all hope, but we will get a lot more clarity.”
In 2018, Coinbase was valued at around $8 billion, though it is likely that the crypto giant will seek a much higher valuation for the IPO due to the accelerating growth of the cryptocurrency industry in the past three years.
Last week, Coinbase revealed that it is looking at conducting its public offering by direct listing rather than a typical IPO. This means that the firm will allow its stakeholders to sell their stock directly to the public without lock-ups.