Kraken Eyes $100 Million in Pre-IPO Fundraising as Market Rebounds

Amid the ongoing bull market, renowned cryptocurrency exchange platform Kraken is reportedly planning to raise at least $100 million in a pre-IPO round, with the aim to go public as soon as next year. Insiders have told Bloomberg that the exchange, one of the industry’s oldest and most established, aims to complete this funding round by the end of 2024. 

This development comes amidst a notable shift in market conditions, regulatory approaches, and increased institutional interest in cryptocurrencies.

Kraken IPO Preparations

The fresh round of funding is expected to propel Kraken towards achieving its long-held ambition of going public. Kraken’s pursuit of an IPO has been on the agenda since at least 2021. However, the path keeps facing challenges, including market crashes and regulatory setbacks.

Meanwhile, Kraken is reportedly seeking to bring a high-profile company onto its board, further solidifying anticipation of a successful IPO. While discussions have so far been verbal, this strategic move is aimed at ensuring the IPO can proceed smoothly and successfully next year.

Kraken Eyes Crypto Adoption

In a statement released on Thursday, Kraken emphasized its dedication to its mission of accelerating the global adoption of cryptocurrency. “We are always exploring strategic paths toward Kraken’s Mission: accelerating the global adoption of crypto,” the company stated.

Should Kraken receive approval for its IPO, it would become the second cryptocurrency exchange to be listed on stock exchanges, following Coinbase’s footsteps. This potential public listing would not only legitimize the exchange further but also open up new avenues for growth and investment.

Regulatory Challenges

Despite settling a case with the U.S. Securities and Exchange Commission (SEC) in the past, the platform is currently facing another legal battle with the regulator. The SEC has accused Kraken of operating as an unregistered securities broker-dealer, clearing agency, and exchange. These charges echo those brought against Coinbase, the largest U.S. crypto exchange. Kraken has disputed these allegations, arguing that the SEC’s case lacks merit and misinterprets fundamental legal concepts. 

Meanwhile, the regulatory environment appears to be becoming more favorable. Lawmakers, regulators, and politicians in the U.S. are increasingly viewing cryptocurrencies in a positive light, amid the upcoming presidential elections.

Amid the surge in cryptocurrency prices, Kraken is anticipated to generate between $1 billion and $2 billion in revenue this year, according to sources. In comparison, Coinbase, which went public via a direct listing in 2021, is projected to reach $5.9 billion in revenue, based on analysts’ estimates compiled by Bloomberg.