Coinbase, one of the biggest digital currency exchanges in the world, has been speculated to be planning a direct listing for some time.
In an official blog post, according to a registration filing with the United States Securities and Exchange Commission, the cryptocurrency exchange announced intentions to seek a direct listing of its Class A common stock. After the securities regulator finishes its analysis, the Form S-1 registration statement will become effective.
The direct listing format would not offer new shares, it would explicitly sell existing shares to the public instead. The opportunity to sell without lockups, a concept recently used by Palantir and that has the potential to produce “instant billionaires.” may be some of the benefits of the format for those with shares in the firm.
According to cointelegraph.com, direct listings do not require the services of an underwriter to promote the sale, as in an IPO. Direct listings are said to protect against share dilution, in addition to eliminating the lock-up period.
“This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities,” Coinbase said. “This announcement is being issued in accordance with Rule 135 under the Securities Act.”