Coinbase, one of the largest crypto exchange companies in the United States have announced its plans on Monday to raise $1.5 billion through a debt offering.
Being the largest crypto exchange in the world, Coinbase has greatly benefited from the growing adoption rate of digital assets, but it has also been a subject of regulatory scrutiny and suffered blows from market volatility.
The crypto exchange has been facing increased attention from securities regulators in the United States, particularly from the Securities and Exchange Commission, or the SEC. Coinbase’s recent announcement was made following a warning from the SEC, with the agency threatening to sue the leading exchange on its upcoming crypto lending program announced last week. Brian Armstrong, the CEO of Coinbase, stated that there are numerous crypto firms in the market that are currently providing similar lending services to their users.
According to the announcement, the crypto exchange plans to expand its company’s balance sheet for general corporate purposes using the raised capital. Coinbase will utilize the funds for potential investment opportunities, and for acquiring other companies along with the latest crypto-based products and technology. The exchange noted that the offer enclosure is subjected to the market status and other conditions.
The newly raised capital funds are aimed at providing $1.5 billion aggregate principal amount of the firm’s senior notes to the clients. The notes are due in 2028 and 2031, and they will be fully guaranteed and backed by the company’s subsidiary firm, Coinbase Inc., which is currently acting as the global crypto exchange’s holding company. The firm added any redemption provisions, interest rates, and other terms of the agreement in the capital raised, which are all subjects to negotiations between initial purchasers of the raise and the firm’s providers.
The crypto exchange emphasized the related guarantees of the senior notes, stating it would only be offered and sold to purchasers through a private offering memorandum. Under the local securities laws as well as outside the United States, the initial purchaser must be reasonably believed to be qualified for institutional buyers.
Coinbase is one of the leading crypto exchanges in the world, facilitating over $5.6 billion in daily trading volumes. Earlier in May, the exchange had planned to raise $1.25 billion via a private debt securities offering after directly listing itself on Nasdaq in mid-April, going public.
