- Coinbase has tapped Goldman Sachs to lead its upcoming initial public offering, according to two sources familiar with the situation.
- One of the cryptocurrency exchange’s two founders, who left in 2017, was a trader at Goldman Sachs.
- News about the company’s IPO comes as Bitcoin’s price hit a record high Thursday, bolstering other cryptocurrencies.
- Visit Business Insider’s homepage for more stories.
Goldman Sachs is leading Coinbase’s upcoming initial public offering, according to two sources familiar with the matter.
The cryptocurrency platform said Tuesday that it confidentially filed IPO paperwork to the Securities and Exchange Commission on Thursday, the first step toward an initial public offering.
A spokesperson for Goldman declined to comment. A spokesperson for Coinbase declined to comment.
Coinbase’s ties with Goldman run all the way up to cofounder Fred Ehrsam, who started his career at the firm as a foreign exchange trader in 2010. He worked there for two years before founding Coinbase with current CEO Brian Armstrong. Ehrsam left Coinbase in 2017, though he maintains a board seat, to co-found cryptocurrency-focused venture capital firm Paradigm.
See more:Coinbase wants to go public. Its CEO needs to change his leadership style first, insiders say.
Goldman has had a busy fall working on a number of high-profile IPOs. The company led offerings for DoorDash, Wish, Snowflake, and Unity Software, and worked on other IPOs including Airbnb and GoodRx, among others.
The investment firm has warmed to cryptocurrency in some facets of its business. In July, managing director Mathew McDermott moved from running the investment bank’s internal funding operations to become its global head of digital assets. London-based McDermott told CNBC in August that he was in the early days of exploring the creation of a Goldman coin.
But in May, the firm ignited controversy among the crypto community with a research report that outlined five reasons that crypto is not an asset class or a suitable investment.
Coinbase IPO groundwork comes amidst Bitcoin rally
Coinbase has been preparing for an initial public offering since July, according to Reuters. It would be the first major US cryptocurrency exchange to go public.
The exchange was founded in 2012 by current CEO and board director Brian Armstrong and Ehrsam. The company has raised $525 million to date and was last valued at $8 billion, according to Pitchbook.
The news comes as Bitcoin’s price hit record highs, with a price of $23,770.85 on Thursday, bolstering the price of other cryptocurrencies. Coinbase’s filing comes after a string of other listings and IPO filings. Multiple startups, including DoorDash, Airbnb, Affirm, Roblox, and Wish, have filed to go public or gone public this year.
Amid the crypto surge, Armstrong cautioned newcomers to cryptocurrency in a blog post published Wednesday.
“While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk,” he wrote.
In recent months, the CEO has also faced backlash from employees over company policies. In June, Armstrong declined to say “Black Lives Matter” in a meeting, deeming the statement “divisive.”
And in September, Armstrong told employees that he wanted the company to be “laser-focused” on its mission to expand access to cryptocurrencies and implied that activism was a distraction in the workplace.
In the wake of the memo, 60 employees, about 5% of the startup’s workforce, voluntarily resigned from the company.
And in November, former employees, who are Black, told The New York Times that they were “tokenized” at work. Some said they were subject to racist comments. Others told The Times that white employees were promoted over Black workers, despite having less experience.
Candy Cheng and Reed Alexander contributed reporting to this story.
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