Crypto companies are still in the midst of a reshuffling, just as various Wall Street entities are. After layoffs in the spring, a trend of executives coming and going is continuing across the market. One of the most high-profile changes is that of the Kraken crypto exchange, which is getting its first new CEO in over a decade. But, does this move stand to slow the company’s march toward an initial public offering, or IPO?
Kraken is one of the largest U.S.-based crypto exchanges, and since founding the company in 2011, Jesse Powell has been heading it as CEO. Punctuating its first decade as a company with the massive crypto bubble and its subsequent crash, Kraken now stands among the largest crypto players in the world. It handles hundreds of millions of dollars worth of transactions each day.
And in recent years, investors have been getting excited by the prospect of Kraken stock. The company has teased plans to go public several times, and Powell had said it would try to do so before the end of 2022. If it does end up going public in the near future, it stands a great chance of being the second crypto exchange to trade on Wall Street after Coinbase (NASDAQ:COIN).
But for all the hype it brings with it as a potential stock play, Kraken has dealt with its fair share of adversity. Over the summer, the company became the target of an investigation by the U.S. Department of the Treasury. The agency is looking into Kraken’s servicing of Iranian, Syrian and Cuban customers. The U.S. has active sanctions against all three countries. While this may complicate Kraken’s IPO chances, so could the new changing of the guard.
Kraken Crypto Exchange: No SEC Registration on the Way
The Kraken crypto exchange is undergoing one of its biggest changes ever this month. Jesse Powell will be stepping down from the top spot at his very own company before the fourth quarter. Investors may be excited by the new change of pace. However, comments from the incoming executive raise questions over whether Kraken can hit its timeline for public listing.
Keeping in line with a recent trend plaguing both the crypto market and the traditional stock market, CEO Jesse Powell has announced plans to step down as CEO of Kraken. According to Powell, the decision comes from an interest in focusing less on the day-to-day tasks of an executive and more on crypto advocacy. This comes at a time when plenty of other crypto leaders, like FTX’s Sam Bankman-Fried, have taken an interest in influencing crypto policy.
The incoming CEO will be current Chief Operating Officer Dave Ripley. He is set to assume executive duties for the company’s fourth quarter. Investors may have been expecting the company to start making moves toward its IPO. But, the switch could lead to some speed bumps. So, too, could comments by Ripley suggesting Kraken isn’t even trying to make these moves.
A report late last week showed Ripley refuting the idea of registering with the Securities & Exchange Commission (SEC). Previously, the government body had advised crypto companies to register with it if they offer tokens which it considers securities. Ripley says that since Kraken does not offer any such tokens, it sees no reason to register with the SEC. “There are not any tokens out there that are securities that we’re interested in listing.”
The comments do sow a bit of confusion. Given its highly public plans to pursue an IPO, investors are wondering whether Kraken is abandoning these plans. Of course, doing so would require the company to submit an S-1 and register with the SEC. It appears investors will have to wait for some clarifying comments from Ripley. Then, they might understand whether he truly means it is abstaining from all collaboration with the agency.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
