Japanese exchange Coincheck has announced its intention to join Coinbase as one of the two publicly listed exchanges in the United States. The crypto trading platform is set to complete its listing on the Nasdaq via a partnership with special purpose acquisition company Thunder Bridge Capital Partners IV (THCP) by the second or third quarter of this year. Once the merger is finalized, Coincheck Group BV will be rebranded as Coincheck Group NV and listed on the Nasdaq stock exchange under the ticker symbol CNCK.
By choosing to go public via a SPAC, Coincheck is taking a route that differs from the traditional initial public offering process undertaken by Coinbase. While SPACs offer a quicker and less cumbersome avenue to public listing, they come with their own risks. Most SPACs have performed poorly in the public market, with 21 firms going bankrupt in 2023 after merging with SPACs. This trend has also led to significant investor losses, totaling $46 billion. Coincheck’s decision to opt for a SPAC listing may raise concerns among investors who are wary of the volatility associated with this method.
Despite the potential risks, Coincheck is one of the largest crypto exchanges in Japan, boasting 1.98 million verified users and a strong track record since its establishment in 2014. The exchange has built a solid reputation over almost a decade of operation. However, its public listing plans come at a time when the SEC is increasing its regulatory scrutiny on the cryptocurrency industry. Recent actions such as serving Wells Notices to firms like Consensys, Uniswap, and Robinhood’s crypto arm reflect the regulator’s concerns about compliance with securities laws.
SEC Chair Gary Gensler has emphasized that most cryptocurrencies are considered securities tokens and lack the necessary disclosures to protect investors. Gensler’s remarks highlight the regulatory challenges faced by the cryptocurrency industry, particularly in terms of investor protection and compliance with securities regulations. Coincheck’s move to go public in the midst of heightened regulatory scrutiny underscores the need for transparency and adherence to regulatory standards in the evolving landscape of cryptocurrency trading.
Coincheck’s decision to pursue a public listing on the Nasdaq through a SPAC partnership carries both risks and rewards. While the exchange’s strong reputation and user base provide a solid foundation for its move to the public market, the uncertainties surrounding SPAC listings and regulatory challenges in the cryptocurrency industry pose significant hurdles. As Coincheck navigates the path to its public listing, it will need to address these challenges head-on to gain investor confidence and ensure long-term success in the dynamic crypto market.
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