The fundraiser ambitions come less than a week after the exchange announced it might face legal action from US regulators if it went ahead with plans to establish a scheme that would allow users to earn money by lending digital assets.
Coinbase Global Inc. announced on Monday that it plans to raise around $1.5 billion through a debt offering to fund product development and prospective mergers and acquisitions.
The fundraising ambitions come less than a week after the exchange announced it might face legal action from US regulators if it went ahead with plans to establish a scheme that would allow users to earn money by lending digital assets.
Coinbase, as one of the world’s major cryptocurrency exchanges, has benefited from the expanding acceptance of digital assets, but it has also suffered from the volatility and regulatory attention that has surrounded it.
Coinbase scored a success with the bond offering, despite the Securities and Exchange Commission’s caution against creating a product that would allow customers to earn interest on their cryptocurrency holdings.
Other sources familiar with the issue indicated that equal amounts of seven- and 10-year bonds were sold at interest rates of 3.375 percent and 3.625 percent, respectively, which were lower than the previously negotiated borrowing prices.
The positive response from fixed-income investors demonstrates that cryptocurrencies is no longer a venture-capital-only market, as debt investors such as pension funds and hedge funds seek to participate.
Coinbase is the market’s second crypto-related junk bond issuer. MicroStrategy Inc., a software company that is branching out into digital assets, sold $500 million in notes in June to fund the purchase of Bitcoin.
Coinbase, a cryptocurrency brokerage and exchange, plans to use the additional funds for general company reasons, such as product development and acquisitions.
Coinbase didn’t receive rock-bottom borrowing prices despite being able to lower its rate. The new bonds were given a rating that was one level below investment grade. According to Bloomberg bond indexes, similarly rated debt has an average yield of 2.86 percent.
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