Japanese cryptocurrency exchange Coincheck has announced its plans to join Coinbase as one of the two publicly listed exchanges in the United States. The company expects to complete its listing on the Nasdaq through a partnership with special purpose acquisition company (SPAC) Thunder Bridge Capital Partners IV (THCP) by the second or third quarter of this year. This move will see Coincheck Group BV rebranded as Coincheck Group NV and listed on the Nasdaq stock exchange under the ticker symbol CNCK. The decision to go public via an SPAC sets Coincheck apart from the traditional initial public offering process followed by Coinbase.
While the idea of going public via a SPAC may seem appealing due to the expedited process and reduced regulatory hurdles, it comes with its own set of risks. Historically, most SPACs have underperformed in the public market, with a significant number of them resulting in bankruptcy. In fact, in 2023 alone, at least 21 firms that went public through SPAC mergers ended up bankrupt, leading to substantial investor losses totaling $46 billion. This track record makes Coincheck’s decision to choose this route for its public listing a cause for concern among investors.
Coincheck’s move to go public comes at a time when the Securities and Exchange Commission (SEC) has been increasing its regulatory scrutiny of the cryptocurrency industry. The SEC has recently served Wells Notices to companies like Consensys, Uniswap, and Robinhood’s crypto arm, alleging violations of securities laws. SEC Chair Gary Gensler has also reiterated the agency’s stance that most cryptocurrencies should be classified as securities tokens, lacking the necessary disclosures to protect investors. This increased regulatory pressure adds another layer of uncertainty to Coincheck’s public listing plans.
Despite the risks associated with its chosen path to going public, Coincheck boasts a solid reputation as one of the largest cryptocurrency exchanges in Japan. With nearly 2 million verified users and a decade-long track record since its establishment in 2014, the exchange has built a strong foundation in the industry. However, whether this reputation will be enough to mitigate the concerns surrounding its SPAC merger remains to be seen.
Coincheck’s decision to go public via an SPAC on the Nasdaq presents both opportunities and risks for the company and its investors. While the expedited listing process may offer benefits, the historical performance of SPAC mergers and the current regulatory environment pose significant challenges. Only time will tell how Coincheck’s gamble on the public market will play out.