Undeterred by the notice from United States Securities and Exchange Commission (SEC), Coinbase announced yesterday, that it would be raising $1.5 billion, through a debt offering.
America’s largest exchange is looking to bolster its balance sheet through low-cost capital and for general corporate purposes. It includes potential investments and acquisitions of other companies, products, or technology, according to a press release.
The will be achieved by offering $1.5 billion aggregate principal amount of the company’s Senior Notes due 2028 and 2031. The same will be guaranteed fully Coinbase Inc., a wholly-owned Coinbase subsidiary acting as its holding company. The closing of the offering is subject to market and other conditions, the company noted.
Moreover, the notes and the guarantee will be offered and sold by the means of a private offering memorandum to only those believed by the company to be qualified institutional buyers under securities laws within and outside the United States. The announced further added,
“Neither the notes nor the related guarantee have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from such registration requirements.”
Carrying out over $5.6 billion in daily crypto trade, Coinbase is one of the world’s largest cryptocurrency exchanges. And since it went public in April this year, it is also one of the gateways for institutional investors to gain indirect crypto exposure.
Banking and Finance biggies such as JP Morgan and Goldman Sachs are known to hold millions worth of Coinbase shares, decreasing their potential risk but getting in on the crypto action. As the exchange registered a whopping $160 million in profits over the last quarter, it has come out as an alternative for investors to put big money into crypto.
Moreover, the exchange had recently announced that it will be investing $500 million into buying tokens like Bitcoin, Ethereum, and DeFi tokens, with the possibility of an increase in allocations as the crypto-economy matures. These latest offerings might as well be a step towards further increasing investor attention towards the fast-growing company.
These bouts of financial expansion have come at a time when the SEC has threatened to sue the Nasdaq-listed exchange over its upcoming crypto lending program. Coinbase CEO Brian Armstrong pointed out that a number of other crypto companies already offer similar lending services to their customers.