Kraken Offers Retail Investors a Piece of the Exchange for $1,000 at a $4B Valuation
An email invitation circulated to crypto supporters, pointed to a private placement of shares valuing Kraken at $4 billion.
The Kraken exchange reached out to retail investors, offering them a piece of the business for as low as $1,000. This values the exchange at $4 billion and extends the practice of Kraken to seek private investments from large-scale buyers. But this time, Kraken offers a retail option.
The Kraken Support Twitter account has confirmed the news:
The email circulating showed that the preferred share sale started on May 20, and will continue until June 20:
The investment is open to accredited investors, not for the wider public. The email points users to a website dedicated to “the bank of the future”, requiring a registration. The site claims that so far, more than $689 million were raised by a decentralized group of investors. The registration allows for three categories of investors - professional, high net worth individuals, or sophisticated investors.
Despite the improved reputation of Kraken, there are still skeptics that see the move as a way to gather fresh funds in exchange for future promises. The Kraken proposition arrives at a time when exchanges are viewed with extreme skepticism. This is especially worrying after Bitfinex allegedly raised as much as $1 billion in just a few short days, by selling another native token, LEO. In the case of Bitfinex, the sale had the special purpose of covering up the missing $850 million, locked due to the investigation against Crypto Capital.
Kraken is one of the fully legalized exchanges offering a fiat off-ramp, as well as a direct selling venue for Tether (USDT). The exchange is therefore extremely attractive, but may also be instrumental to exit scams or other sell-offs. Kraken was also suspected as being used to liquidate some of the funds of the Canadian QuadrigaCX exchange.
The difference for Kraken is that the exchange has so far abstained from selling tokens, or performing any type of initial exchange offering (IEO), for its own purposes or for third parties. The direct selling of shares connects mainstream investors to the potential earnings of a cryptocurrency company.