Crypto Companies and Initial Public Offerings

Ripple’s CEO Brad Garlinghouse attended the World Economic Forum in Davos. On January 23, during his speech, he mentioned crypto companies and Initial Public Offerings.

According to Garlinghouse, in the next 12 months, crypto and blockchain companies will go public. Ripple’s CEO stated his company also plans to go public. However, he did not provide the details when Ripple intends to make this decision.

Based on this speech, it becomes clear that interest is growing among crypto-related companies.

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As a reminder, an IPO (Initial Public Offerings) refers to the process of offering the shares of a private corporation to the public in a new stock issuance.

A new era for the crypto companies

In the past crypto companies used to focus on initial coin offerings (ICO). There are several reasons why companies preferred ICO. In comparison with a traditional IPO, initial coin offerings are more comfortable to complete for the young and innovative companies.

IPO includes many legal, regulatory processes, and it is not easy to fulfill all the requirements. However, the situation started to change as many ICO failed and companies are trying to deal with these problems.

Thus, crypto firms are willing to work harder to build confidence with mainstream investors by listing their shares on traditional stock exchanges. However, to accomplish this goal, they have to disclose financial information.

Nevertheless, several crypto companies such as Blockstack decided to pursue compliant token sales. The United States Securities and Exchange Commission approved a token offering. This is an alternative to adopting a traditional flotation model.

Several months ago, Silvergate Bank from California went public with an IPO on the New York Stock Exchange. This bank is focused on digital currency businesses.

The crypto industry is moving forward, and crypto companies will have the opportunity to demonstrate that IPO is not out of reach. However, companies should be careful as they will face new challenges.