Last Thursday, the largest North American-based exchange, Coinbase, announced that it had filed a confidential S-1, an initial step to listing its shares on a national stock exchange. While this move will surely lead to even more high and FOMO in the cryptocurrency space, it may also subject the exchange to even closer regulatory scrutiny from the SEC.
According to Gabriel Shapiro, an attorney with Belcher, Smolen & Van Loo LLP, the SEC has recently been trying to intervene in the governance process of public or soon-to-be-public entities, even though corporate governance law has historically been defined by state law. “They’ve been monkeying with governance rules like this at the federal level even though there's no federal laws around this,” he said.
For example, the SEC could say that crypto trading platforms need clearer procedures for how they list or delist different cryptocurrencies. This means the SEC could essentially impose its will on which coins get listed on the exchange, and which coins don't.
Confidential S-1 documents are typically kept secret until three weeks before the issuing party goes on its public relations tour to entice potential investors. However, Coinbase chose to "go public" with this filing right away. They may be looking to take advantage of the booming Bitcoin price (currently hovering at all-time highs) as well as the stellar IPO market. “IPOs are hot again,” Shapiro said. “This is a fantastic time to IPO, so they probably want people to know about it, they want people to buy it. The headlines are about BTC so it’s great timing.”
We still have some time to wait before we can jump on this sale, however, only time will tell how the SEC will regulate the company once it goes public.