Coinbase Might Launch an Initial Exchange Offering Platform, Also Considering Security Tokens

San Francisco-headquartered digital asset exchange Coinbase might be releasing a new token, according to its head of institutional sales in Asia, Kayvon Pirestani.

Pirestani, a former executive at Morgan Stanley, says Coinbase is considering launching an initial exchange offering (IEO) platform, in addition to other capital-formation tools. Pirestani’s comments came during a panel discussion (on Wednesday) about the evolving digital currency capital formation sector at Coindesk’s Invest: Asia Conference.

The former Deutsche Bank equity derivatives sales director states:

“We think there’s a really interesting opportunity there for Coinbase.”

He adds:

“[We’re] carefully exploring not only the IEO space but also STOs [security token offerings]. But I can’t make any formal announcements right now.”

Coinbase Could Launch IEO Platform in the “Next Few Months”

IEOs are already being conducted by other major crypto exchanges including Malta-based Binance, Bitfinex, KuCoin, and OKCoin. 

IEOs might be a more reliable form of fundraising than initial exchange offerings (ICOs) because with IEOs, an established exchange serves as a trusted broker offering the token sale.

When an exchange facilitates an IEO, it must make a commitment to carry out the appropriate  know your customer (KYC) and anti-money laundering (AML) checks and procedures on the token issuer’s behalf.

It could take longer for Coinbase to offer regulated securities in the US market, however Pirestani revealed that the leading exchange could launch an IEO platform in the “next few months.”

Coinbase has acquired several securities companies with broker-dealer permits including Digital Wealth LLC, Venovate Marketplace, and Keystone Capital Corp. after being approved by US regulators in July 2018.

At present, Pirestani says Coinbase is “digesting” its acquisitions and “repurposing” various  licenses.

Coinbase Invests Millions in DeFi Projects

He also mentions that security tokens are “talked about a lot but traded much less” and that Coinbase intends to launch its STO product after market demand has picked up.

In addition to considering STOs and an IEO launch, Coinbase is investing in the emerging decentralized finance (DeFi) ecosystem.

The exchange’s management announced on Tuesday that it’s investing 1 million USDC in peer-to-peer lending protocol Compound and another million USDC in the dYdX project. 

Referred to as the “USDC Bootstrap Fund,” Coinbase’s new fund will support blockchain developers by “investing USDC directly in the protocol.”