Coinbase Sets Out To Raise About $1.5 Billion Via Bond Sales

On Monday 13th, Coinbase (COINannounced plans to raise around $1.5 billion in a bond sale. The announcement comes after SEC’s threats of legal actions if Coinbase launches lending services. In fact, some investors see this as Coinbase’s alternative to their last week’s planned lending project.

The trading entity is the most popular crypto exchange, with over $5.6 billion daily trading volume. It announced on Monday plans to launch a debt offering worth $1.5 billion. This offering will raise capital to grow Coinbase and bolster its balance sheet. The report reads:

“This capital raise represents an opportunity to bolster our already strong balance sheet with low-cost capital.”

The funds raised will help general corporate business including, product development and acquisitions. Yet, the market conditions will determine the closing of this offering.

Coinbase Inc will be the guarantee of these issued bonds, which will mature between 2028 and 2031. Each bond sale will be unique and customized. The policies and requirements will change depending on the agreement between the bondholder and the company. Thus, interest rates and amounts will all change based on the person involved.

Facing Regulatory Troubles

Although Coinbase is the largest crypto exchange, it has faced many regulatory issues recently. In fact, since its launch, Coinbase’s shares have lost over 34% of their launch price in May. Last week, the SEC threatened legal actions against Coinbase for launching lending services.

Coinbase earlier announced a lending program that would help users earn interest. The SEC immediately declared legal actions on the firm. SEC claimed that the new product required a government registration. Brian Armstrong, Coinbase CEO, said that many other crypto exchanges have a similar program. Mr. Armstrong was insinuating that the SEC was at war against his firm.

Coinbase did not launch the project. Yet, attempts to raise funds through bond sale could be an alternative to the lending program. Some reports claim that Coinbase is trying to circumvent the SEC saga through the bond issue. 

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