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Coinbase announced a $1.5 billion bond sale shortly after the Securities and Exchange Commission threatened to sue the company over its lending programme.
Coinbase, the largest cryptocurrency exchange in the United States, is planning to raise $1.5 billion via a debt offering, the company officially announced Monday.
The Nasdaq-listed crypto exchange is looking to use the capital raised to further grow the company’s balance sheet for general corporate purposes as well as potential investments and acquisitions of other companies, products or technology, Coinbase said. The closing of the offering is subject to market and other conditions, the firm noted.
The new offering plans to provide a $1.5 billion aggregate principal amount of the company’s senior notes due 2028 and 2031, which will be fully guaranteed by Coinbase Inc., a wholly-owned Coinbase subsidiary that serves as its holding company. Negotiations between the firm and the initial purchasers will determine the interest rate, redemption provisions, and other aspects of the raise.
Coinbase stated that the notes and related guarantee would only be offered and sold through a private offering memorandum to persons “reasonably considered to be qualified institutional buyers” under local securities laws and outside the United States.
“Neither the notes nor the related guarantee have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from such registration requirements,” Coinbase added.
The announcement comes as Coinbase faces growing scrutiny from securities regulators, with the US Securities and Exchange Commission threatening to prosecute the exchange last week over its forthcoming crypto lending programme. Coinbase CEO Brian Armstrong pointed out that there are presently a number of other crypto firms on the market that offer comparable loan services to their consumers.
Coinbase is one of the world’s major cryptocurrency exchanges, with daily trading volumes exceeding $5.6 billion. Previously, the business planned to raise $1.25 billion in a private debt securities offering in May 2021, shortly after going public with a direct listing on Nasdaq in mid-April.