Cryptocurrency platform Coinbase (NASDAQ:COIN) Global, Inc. has announced a private placement of $1 billion in convertible notes with a maturity date of 2030.
Coinbase said in the announcement that the private placement is only available to investors classified as “qualified institutional buyers.” Bonds are a type of security that institutions sell as a way to raise money from investors.
“Coinbase also expects to grant the initial purchasers of the Notes a 30-day option to purchase up to an additional $150 million of the Notes solely to cover the excess Notes,” the company said in a press release. “The Notes will constitute senior unsecured obligations of Coinbase, will accrue interest payable semi-annually on arrears, and will mature on April 1, 2030 unless repurchased, redeemed or converted earlier than the announced date.”
Following in the footsteps of MicroStrategy
Prior to Coinbase, MicroStrategy (MicroStrategy) raised funds in a similar manner by announcing a similar offering. On March 8, the company confirmed that it had completed the previously announced offering of 0.625% convertible senior notes with a maturity date of 2030, bringing the total amount of notes sold in the offering to $800 million.
MicroStrategy announced a new massive deal to buy Bitcoin (BTC) worth $800 million at an average price of $68,377 per coin. The new deal was financed using $700 million of the proceeds from the subscription of convertible bonds; it is worth noting here that MicroStrategy owns 205,000 Bitcoin (BTC).
Coinbase Files Lawsuit Against SEC
Coinbase has had a busy week. On Monday, news broke that Coinbase has filed a lawsuit against the Securities and Exchange Commission (SEC), seeking court guidance for the regulator to set clear rules for the cryptocurrency industry.
In a detailed lawsuit filed with the court on March 11, Coinbase complained about the SEC’s lack of clear rules for the crypto sector, asserting that the agency’s actions have hindered the development and clarity of the crypto industry.
Lack of SEC Regulation of Digital Assets
The lawsuit criticizes the SEC for its negative stance on regulating the crypto sector, defending its view by saying that the lack of clear rules has left the sector in a state of regulatory limbo.
“For years, the SEC has argued that it lacks sufficient legal jurisdiction over digital assets and that the authority it has has been unclear,” Coinbase said. “Market participants have responded by investing heavily in the now $2 trillion industry and building their businesses in compliance with the relevant regulatory frameworks of the relevant legal entities.”
