Coinbase to raise $1.5bn through bonds amid regulatory issues

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The company, which is being threatened with an SEC lawsuit, said it may use the cash to fund acquisitions and product development.

Cryptocurrency exchange Coinbase is planning to raise $1.5bn in debt capital through the sale of bonds.

The bonds will be due for repayment in 2028 and 2030. The interest rates and other conditions of the bonds will be negotiated between the company and the purchasers.

Coinbase said the funds will be put towards product development and potential acquisitions, though it did not say if it was actively considering any such deals.

In a statement, the company said the funding “represents an opportunity to bolster our already-strong balance sheet with low-cost capital”.

“Coinbase intends to use the net proceeds from the offering for general corporate purposes, which may include continued investments in product development, as well as potential investments in or acquisitions of other companies, products, or technologies that Coinbase may identify in the future.”

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Last week, Coinbase also revealed it was being threatened with legal action by the US Securities and Exchange Commission (SEC) over its plans to launch a digital asset lending service called Lend.

The planned service will allow users to earn interest on their crypto and other digital assets on the platform by lending them to other users, underwritten by Coinbase itself. The SEC said that this qualifies as an “investment contract” and is therefore a security under US federal law. But Coinbase has disagreed.

The company’s CEO, Brian Armstrong, took to Twitter to describe the regulator as engaging in “really sketchy behaviour”. Bloomberg’s Olga Kharif described Armstrong’s reaction as a “fit” and a “rant”.

Many cryptocurrency exchanges have faced increasing regulatory scrutiny in recent months, notably industry giant Binance.

In April, Coinbase became the first crypto exchange in the US to go public via a direct listing on Nasdaq. In May, it reported quarterly revenues of $1.8bn, a nearly 10-fold increase year on year.