Coinbase Announces $1B Bond Sale

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar is a seasoned journalist who has been reporting on cryptocurrency and blockchain technology since 2015. Her work has appeared in leading publications including The Wall Street Journal,...

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March 13, 2024

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Cryptocurrency exchange Coinbase Global, Inc., has announced a private offering of $1 billion convertible senior notes which will be due in 2030.

In an announcement, Coinbase said the private offering is only open to those investors who are classed as “qualified institutional buyers.” Bonds are a type of security sold by corporations, as a way of raising money from investors. When a firm needs to raise capital, issuing bonds is one way to do it.

“Coinbase also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $150.0 million principal amount of notes solely to cover over-allotments. The notes will be senior, unsecured obligations of Coinbase, will accrue interest payable semi-annually in arrears and will mature on April 1, 2030, unless earlier repurchased, redeemed or converted,” said the firm in a press release.

Taking a Leaf out of Microstrategy’s Book

Previously MicroStrategy has raised capital in the same way by announcing a similar offering. On March 8, MicroStrategy confirmed it had completed its previously announced offering of 0.625% convertible senior notes due 2030. The aggregate principal amount of the notes sold in the offering was $800 million.

MicroStrategy announced another seismic Bitcoin purchase of $800 million at an average price of $68,377 per coin. The new purchase was funded using proceeds from the $700 million convertible note offering. MicroStrategy owns 205,000 Bitcoin (BTC).

Coinbase Files Law Suit Against SEC

It is proving to be a busy week for Coinbase. On Monday, it emerged that Coinbase had filed a lawsuit against the Securities and Exchange Commission (SEC), seeking a court directive for the regulatory authority to establish clear guidelines for the cryptocurrency sector.

In the lawsuit detailed in their March 11 court submission, Coinbase challenged the SEC’s lack of formal rulemaking for the crypto sector, asserting that the agency’s actions hindered the industry’s development and clarity.

SEC’s Absence of Digital Asset Rulemaking

The filing criticized the SEC for its passive stance on crypto regulation, arguing that the absence of specific rules has left the sector navigating a regulatory grey area.

“For years the SEC indicated that it had little statutory authority over digital assets and that what authority it did have was unclear,” stated Coinbase. “Market participants responded by investing heavily in a now two-trillion-dollar industry and built their businesses in compliance with relevant agencies’ regulatory frameworks.”