Kraken has been teasing the public about an IPO for quite some time now, and as one of the most successful digital asset platforms globally, investors are on the edge of their seats. But as always, delayed IPOs are the Achilles Heel of private companies.
Here’s everything we know about why the Kraken IPO date is delayed and when Kraken stock will make it into the market:
When Is Kraken IPO?
Kraken’s previous CEO, Jesse Powell, first hinted at an IPO in 2021. He mentioned that Kraken is planning to go public through direct listing. Shortly after that, he said that Kraken plans to change lanes from a DPO to an IPO, not enthusiastic about Coinbase’s poor performance after its direct public offering.
The IPO was supposed to happen in 2022, but now we’re in the second half of 2023, and the lack of updates is worrying. Whether the IPO will happen is still debatable; let’s see why.
Why Is the Kraken IPO Delayed?
The Kraken IPO is late for plenty of reasons, including but not limited to legal issues concerning the SEC, instability in the crypto industry, and a leadership shift.
The whole crypto industry has been under the scrutiny of the SEC for a while now. It started with a lawsuit against Coinbase earlier this year for being an unregistered entity.
As the first crypto start-up to go public on the U.S. stock market, any hit to Coinbase sends reverberations that echo throughout the industry. The lawsuit shifted the business momentum, causing instability that’s likely to postpone IPOs for many crypto companies.
The regulatory actions extended beyond Coinbase and didn’t spare Kraken. In early 2023, the SEC charged Kraken with selling unregistered securities. In February, the crypto exchange decided to settle with a $30 million fine.
But that’s not it. During the summer of 2022, the company went under the watchful gaze of the U.S. Department of the Treasury to serve Cuban, Iranian, and Syrian customers. Since the U.S. has sanctions against these countries, Kraken supposedly violated the law by serving them.
Although none of these legal issues directly prevent an IPO, Kraken still has to submit an S-1 and register with the SEC to go public. Dave Ripley, Kraken’s current CEO, has said blatantly in September 2022 that the company doesn’t plan to register, so it’s easy to see why an IPO is yet to happen.
Shift of Leadership
Since its inception in 2011, Kraken has only had one CEO: Jesse Powell. In late 2022, he announced stepping down from the role, leaving it to the company’s then-COO, Dave Ripley.
According to Powell, he decided to leave the role because he wanted a change from running a day-to-day business. However, he isn’t the only CEO to step down during a time of downturn for the industry.
Alameda’s CEO, Sam Trabucco, did it first, along with MicroStrategy’s CEO, Michael Saylor, who stepped down after a whopping Bitcoin loss of $917 million.
Though a new CEO doesn’t necessarily prevent the IPO, a shift in leadership ought to cause some speed bumps on the road to the IPO—especially with Ripley’s claims about not registering with the SEC.
Funding Information: Kraken Valuation and Raised Funds
If Kraken stock makes it to the market, potential investors need to learn about the company’s valuation, raised funds, and Kraken’s share price.
However, since Kraken is still a private company, little information is available about its financial data. Investors can only predict Kraken share price according to its raised funds and current valuation.
The crypto exchange first raised $5 million in March 2014 in a Series A round. Hummingbird Ventures, Digital Currency Group, and Blockchain Capital collectively led the fund.
Two years later, Kraken raised undisclosed funds in a Series B round. The funds came from Japan’s SBI and were reportedly generous because shortly after, Kraken managed to get two major acquisitions: Glidera and CleverCoin.
Moving on to Kraken's valuation, it was estimated at $4 billion in 2019. Three years later, the company’s valuation was estimated at $10 billion, having raised $129 million in funds. The current valuation isn’t available, but it’s not expected to be far from the $10 billion mark.
To Wrap Up
Though Kraken’s IPO was announced nearly two years ago, it’s yet to become a reality.
The cryptocurrency market is still not on good terms with the SEC, making it harder for some companies to go public. The lawsuit against Coinbase also caused some concerns to arise about the industry’s stability in the stock market.
If you wish to invest in the American crypto exchange, the best you can do is look for some Kraken Pre-IPO investment options. However, until the public offering happens, the Kraken IPO share price won’t be available, and it’s best to wait until new updates arise.
You can register for Kraken IPO updates here.
The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions. We hold no stock or interests in any of the Companies discussed on this website/app.