Coinbase files for IPO listing amidst racism scandal
Cryptocurrency exchange Coinbase has filed with US regulators to go public. The news comes less than a month after revelations of its racist treatment to Black employees came to light.
Coinbase said in a short statement that it had submitted a confidential draft registration statement for an initial public offering (IPO) with the Securities and Exchange Commission (SEC).
The statement did not provide additional details about the timing or size of the prospective listing.
Investors led by Tiger Global Management valued the company at $8 billion in a $300 million round of funding in 2018. This makes it one of the most valuable cryptocurrency companies.
The New York Times (NYT) revealed the acts of racism that led to Black members of staff at the company leaving, noting, “one by one, they left. Some quit. Others were fired. All were Black”.
“According to 23 current and former Coinbase employees, five of whom spoke on the record, as well as internal documents and recordings of conversations, the start-up has long struggled with its management of Black employees,” notes the NYT.
“15 people worked at Coinbase, where they represented roughly three-quarters of the Black employees at the 600-person company. Before leaving in late 2018 and early 2019, at least 11 of them informed the human resources department or their managers about what they said was racist or discriminatory treatment, five people with knowledge of the situation said”.
“One Black employee said her manager suggested in front of colleagues that she was dealing drugs and carrying a gun, trading on racist stereotypes.
“Another said a co-worker at a recruiting meeting broadly described Black employees as less capable. Still another said managers spoke down to her and her Black colleagues, adding that they were passed over for promotions in favour of less experienced white employees.
“The accumulation of incidents, they said, led to the wave of departures.”
Cryptocurrency advocates have eagerly awaited Coinbase’s listing, believing it could lend the sector legitimacy in the eyes of regulators and the public.
The move to markets followed a run of large recent tech IPOs, including from the short-term rental site Airbnb and meal delivery company DoorDash.
The Financial Times notes that the price of bitcoin has surged to new highs in recent weeks, surpassing $20,000 for the first time on 16 December.
This was based off the strength of a broader market rally that has lifted everything from junk bonds to hard-hit travel companies.
The recent cryptocurrency bull market has been driven in part by rising interest from professional investors, central banks and suggestions that digital currencies could benefit as coronavirus-related lockdowns accelerate the shift from cash toward digital payments.
In October, PayPal announced that it would start offering support for cryptocurrencies.
Coinbase is also one of the founding members of the Facebook-led global digital currency project Diem, formerly known as Libra, which is on track to launch next year.