FTX Derivatives Exchange Launches Coinbase Pre-IPO Contracts

Following the news that Coinbase Global Inc has submitted its draft registration to the U.S. Securities and Exchange Commission (SEC) for a potential Initial Public Offering (IPO), FTX Derivatives Exchange has moved a step further by listing Coinbase Pre-IPO (CBSE) Contracts. This listing was made known by the CEO of the FTX Derivatives exchange, Sam Bankman-Fried.

While Coinbase in the announcement released for the IPO filing did not provide any details about the registration, Coingape reported Earlier that market analysts including Messari researcher Mira Christanto believed the company could seek a valuation anywhere near $ 28 billion, whose potential FTX derivatives exchange seeks to leverage with its latest product.

Coinbase products (CBSE) are contracts that will be settled through the exchange of cryptocurrency assets and according to the Key Information document issued by the FTX derivatives exchange, Coinbase pre-IPO contracts “represent futures contracts that have a value associated with stock market specific capitalization – in this case Coinbase Inc. – at the end of its first trading day at the stock exchange. ”

FTX noted that the pre-IPO contracts tracked Coinbase’s market capitalization divided by 25m, with the contract balances due to be converted into an equivalent amount of Coinbase fractional Stock tokens at the end of Coinbase’s first public trading day. FTX added in the Key Information document that if Coinbase fails to go public by June 1, 2022, the pre-IPO contract balances will expire to reflect a widely publicized US $ 8 billion market capitalization.

Other Key Highlights Coinbase Pre-IPO Contracts

Coinbase’s pre-IPO product will be operated by FTX Derivatives Exchange and CM-E, a financial service company based in Munich with the latter providing purchase and sale prices for the contracts.

CBSE Coinbase contracts are not available to US residents in accordance with FTX exchange regulatory compliance policies and the exchange advises potential customers to be wary of potential losses associated with non-investment investing deep of the product.

Coinbase Global Inc. noted that the completed Form S-1 is expected to become effective upon completion of its review process by the SEC, subject to market and other conditions. “Consumers should therefore not confuse pre-IPO FTX contracts with investment in potential Coinbase stocks.