US-based cryptocurrency exchange Kraken is reportedly considering a final funding round as it explores the possibility of an initial public offering (IPO), according to sources familiar with the matter. The stock exchange has received inquiries from potential investors amid the current rise in the stock market Digital assets market.
Kraken is preparing for a pre-IPO financing round
According to Bloomberg a reportSources indicate that Kraken is likely to seek funding in excess of $100 million. Renewed interest from investors, coupled with a notable shift in US regulatory attitudes toward digital assets, has reignited discussions about companies in the cryptocurrency sector going public. Recently, Bitcoinist too mentioned Robinhood has acquired another cryptocurrency exchange Bitstamp.
Kraken has been contemplating an IPO since at least 2021. The financing round, which will likely be designated as a pre-IPO round, is expected to be completed by the end of the year, according to one of the sources.
Kraken, which was founded in 2011 in San Francisco and operates under its parent company Payward, said it remains committed to its mission of accelerating the global adoption of cryptocurrencies.
While Kraken has expressed its intention to go public for several years, previous market downturns and… Regulatory challengesincluding ongoing legal battles with the US Securities and Exchange Commission (SEC), have hampered its progress.
Kraken settled one case with the SEC in 2020 but is still involved in another. Accused Operating an unregistered securities broker, clearing agency and stock exchange. The company rejects these allegations.
Regulatory tailwinds
In recent months, US regulators and politicians have taken a more positive stance towards cryptocurrencies as the US Presidential campaigns Things have changed, as cryptocurrencies have become one of the major issues in the race for the White House.
The US Securities and Exchange Commission's approval of exchange-traded funds (ETFs) that invest in Bitcoin and its steps toward approving funds similar to Ethereum also indicate a growing acceptance of the digital asset.
According to Bloomberg, with cryptocurrency prices rising throughout the year, Kraken is expected to produce he won Between $1 billion and $2 billion this year, according to insiders.
By comparison, Coinbase, the largest U.S. cryptocurrency exchange, which went public via a direct listing in 2021, is expected to generate revenue of $5.9 billion, according to Bloomberg analysts compiled.
Kraken is now actively looking for a company to join its board and ensure a successful IPO, possibly as early as next year. Discussions to date have involved informal exchanges of terminology and evaluations, without formal documentation.
The total market cap of cryptocurrencies now stands at $2.5 trillion, while Bitcoin, the largest cryptocurrency on the market, is consolidating above the key threshold of $70,000.
Featured image of DALL-E, chart from TradingView.com
