San Francisco-based cryptocurrency exchange Coinbase may soon issue a proprietary exchange token, according to Coinbase’s head of institutional sales in Asia, Kayvon Pirestani.
Speaking on a panel Wednesday about the evolution of cryptocurrency capital formation at CoinDesk’s Invest: Asia conference, Pirestani said an initial exchange offering (IEO) platform is one of several capital-formation tools currently being explored by Coinbase.
“We think there’s a really interesting opportunity there for Coinbase,” said Pirestani, adding:
“In a nutshell, Coinbase is carefully exploring not only the IEO space but also STOs [security token offerings]. But I can’t make any formal announcements right now.”
IEOs have already been supported by most other major exchanges including Bitfinex, Binance, OKcoin and Kucoin. Not unlike an initial coin offering (ICO), an IEO is another crowdfunding tool for cryptocurrency startups. It relies on an exchange to act as the trusted broker offering the token sale – with each exchange issuing its own proprietary token (such as Binance’s BNB) to execute the sale. It usually requires a commitment from the exchange to handle know your customer (KYC) and anti-money laundering (AML) checks on a startup’s behalf.
While Pirestani said news about a potential Coinbase IEO platform may emerge in the “next few months,” plans for regulated securities offerings in the U.S. are less far along.
Announced in July 2018, Coinbase received regulatory approval to acquire several securities firms with broker-dealer licenses including Keystone Capital Corp., Venovate Marketplace and Digital Wealth LLC.
About these plans, Pirestani affirmed that broker-dealer licenses have been obtained by Coinbase, but they’re “still digesting” the acquisition and “repurposing” the respective licenses.
Pirestani also noted that security tokens are “talked about a lot but traded much less” and that Coinbase would wait for more market demand to roll out an STO product.
Brian Armstrong image via CoinDesk archives