The decision by Japanese exchange Coincheck to join Coinbase as one of the two publicly listed exchanges in the United States has raised eyebrows among investors. The move to go public via a special purpose acquisition company (SPAC) has sparked concerns about the potential risks involved in this strategy.
Coincheck is expected to complete its listing on the Nasdaq through a partnership with SPAC Thunder Bridge Capital Partners IV (THCP). By using a SPAC, Coincheck can avoid the traditional initial public offering process. However, the performance of SPACs in the public market has been less than stellar, with many companies facing bankruptcy and investor losses.
The decision by Coincheck to go public via SPAC comes at a time when the SEC has increased its regulatory scrutiny of the crypto industry. The financial regulator has served notices to crypto firms like Consensys, Uniswap, and Robinhood for violating securities laws. SEC Chair Gary Gensler has highlighted the lack of investor protections in the crypto space, suggesting that most cryptocurrencies are securities tokens.
Investors in Coincheck will need to carefully consider the risks associated with the exchange’s decision to go public via SPAC. The track record of SPACs in the public market has been concerning, with many companies facing financial difficulties and investor losses. The regulatory scrutiny faced by the crypto industry adds another layer of risk for Coincheck investors.
The decision by Coincheck to go public via SPAC raises significant concerns for investors. The performance of SPACs in the public market, coupled with increased regulatory scrutiny of the crypto industry, presents risks that investors should carefully weigh before investing in Coincheck. As the company moves forward with its public listing plans, investors will need to stay informed and assess the potential risks involved in this strategy.