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Kraken Might Choose IPO Instead of Direct Listing Following Coinbase’s Shaky Debut, CEO Explains

Kraken's CEO Warns of Potential Crypto Regulations in the United States


Kraken is reevaluating its plans on how to go public next year after Coinbase’s unimpressive performance, said the exchange’s CEO – Jesse Powell. Instead of taking its competitor’s method of a direct listing, Kraken could go down the initial public offering road.

Kraken Rethinks Going Public Plans

The largest US cryptocurrency exchange – Coinbase – made the news in mid-April when it became a publicly-traded company after a direct listing on Nasdaq. The move, perceived by many as a groundbreaking event for the entire industry, also caught the attention of others as quite a few companies outlined similar plans.

Among those firms was actually one of Coinbase’s rivals – Kraken. The CEO of the ten-year-old exchange, Jesse Powell, said two months ago, “looking at being able to go public sometime next year.”

Interestingly, Kraken also planned to mimic Coinbase’s approach by doing it through a direct listing. However, it seems that Coinbase’s unconvincing first few months, in which the COIN shares dropped by nearly 40% from their peak, may have changed Kraken’s intentions.

During a recent interview with Fortune, Powell noted that the veteran exchange might put the direct listing plans on the shelf while focusing on an initial public offering.

“An IPO is looking a little more attractive in light of the direct listing’s performance. I would say we’re looking at it more seriously now, having the benefit of seeing how the direct public offering played out for Coinbase.”

Jesse Powell. Source: Medium

Should Kraken indeed proceed with the more traditional IPO approach, the move may raise concerns within the cryptocurrency community. IPO requires intermediaries, which are typically giant banks from Wall Street. Powell himself previously argued that DPO resonates better with the decentralized nature of the crypto industry.

Wall Street Fails to Understand Crypto

Powell further asserted that most Wall Street giants still are unable to fully comprehend the full potential of the cryptocurrency space. In fact, he believes the majority have displayed a somewhat outdated approach, and they have failed to spot promising opportunities in the past as well.

On the question of what Wall Street is misunderstanding about the industry, he explained:

“I think it’s the same thing that the Street missed about Amazon 20 years ago and what they are missing about Tesla now. I think they are just so tied up with the legacy way of doing things.

Wall Street in particular, and this is financial services, and I think there are a lot of players that have a lot to lose from the success of this space. I think you might be seeing people facing this cognitive dissonance of becoming increasingly aware of the impending doom of the legacy financial system.” – he concluded.

 

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