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Cryptocurrency unicorn Coinbase hints in its prospectus that it does not rule out the possibility of issuing tokens in the future.

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Cryptocurrency unicorn Coinbase hints in its prospectus that it does not rule out the possibility of issuing tokens in the future.

As the U.S. cryptocurrency exchange Coinbase continues with its plans for a direct listing, its S-1 filing (the IPO prospectus for U.S. domestic companies) has been made public. Former Coinbase employee Adam White discovered that the exchange disclosed the possibility of issuing security tokens in the future in the document.

Issuing Shares in the Form of Blockchain Tokens

According to a tweet by former Coinbase employee Adam White (now President of digital asset company Bakkt), on page 68 of a document, Coinbase mentioned the possibility of raising more funds to support business growth. To achieve this, the company may issue new shares or stocks in the form of blockchain tokens associated with "customer rewards or loyalty programs."

The company stated in the document:

“If we issue additional equity securities, including in the form of tokens on a blockchain, existing shareholders may be diluted, and the rights of new equity securities may be senior to those of our currently authorized and issued common stock.”

However, it is important to note that the mention of "blockchain tokens" in the risk disclosure section does not mean that Coinbase has specific plans for issuing such tokens, but rather indicates that Coinbase does not rule out the possibility of fundraising through this method in the future. It also shows Coinbase's interest in the model of issuing platform coins by other exchanges such as FTX and Binance.

Holding or paying with exchange platform coins can provide traders with fee discounts and also grant users certain special rights on the platform. The value of platform coins is closely tied to the success of the exchange itself, making it a subject of controversy whether they fall under the category of securities. The potential tokens considered by Coinbase will most likely be issued directly in the form of security tokens.

Adam White concluded in atweet:

"It will be very interesting to closely monitor this and the reactions of other exchanges."