Kraken Eyes 2022 for Direct Listing: Report

Cryptocurrency exchange Kraken is eyeing 2022 as its timeframe to go public, a spokesperson for the platform revealed today.

Currently, Kraken is reportedly engaged in an aggressive fundraising push that would allow it to reach a valuation of $20 billion—twice as much as it currently has. Speaking to The Block today, a spokesperson for Kraken revealed that the company "could go public next year" via a direct listing, the same route chosen by rival exchange Coinbase.

An initial public offering (IPO) or a special purpose acquisition company (SPAC) were previously considered potential routes for Kraken to become a publicly-traded company.

A SPAC is akin to a reverse merger where one (already publicly-traded) company acquires another (that wants to go public) and essentially transforms into it. In the case of a SPAC, there is no “real” company that acts as the buyer—only a "blank check company."

However, in a recent interview with Bloomberg TV, Kraken CEO Jesse Powell recently said the exchange would most likely choose the method of a direct listing.

Kraken also told The Block that the company is “too big” for a SPAC. The spokesperson added that the platform is currently “fully focused on scaling our business, filling key roles and making sure we're giving clients the best experience in a time of unprecedented growth.”

Coinbase, another major US crypto exchange, also chose a direct listing as its preferred way of going public. The main difference with a traditional IPO is that during a direct listing, a company can float only already existing shares. In December 2020, the SEC changed the rules for a direct listing, enabling companies to issue new shares as part of the listing. A direct listing also allows firms to avoid some of the expensive requirements of an IPO.