Organized by: ChainCatcher

Currently, about 13 cryptocurrency companies are queuing up to apply for listing in the U.S. with the SEC, covering various institutions such as exchanges, mining companies, and DeFi protocols.

Why do so many crypto companies want to go public in the U.S.? What is the core appeal of an IPO in the U.S.? For crypto companies, is going public in the U.S. a broad avenue to success, or does it hide challenges and risks that cannot be ignored?

In this episode of Space "U.S. IPO: The Final Destination for Crypto Companies?" we invite Kevin Law, Strategic Cooperation Director at OSL, Midori Ge, BDM at Futu Canada, Jade, PR Manager and Researcher at HashKey Group, Sean Tao, Partner at EVG, Joy Chen, Investment Manager at Waterdrip Capital, XinGPT, Contributor at Distill AI, Tim, CEO of BM Capital, and JT Song, Head of Chinese Operations at 0G to engage in an in-depth dialogue on whether going public in the U.S. has become the ultimate goal for crypto companies.

You can click to listen to the full replay: https://x.com/i/spaces/1yoJMoaOWBDKQ/peek

Question 1: Why do so many crypto companies choose to go public in the U.S.? What are the core attractions of a U.S. IPO?

Kevin: The combination of U.S. IPOs and traditional finance with Web3 will be a key focus for future development, as Web3 gradually integrates with Web2 from both a technological and capital market perspective.

Midori: I have been responsible for Southeast Asia exhibition business at Metisport in Hong Kong for two years and currently reside in Toronto, where I have been paying close attention to overseas markets.

The Futu case shows that the core value of going public in the U.S. for crypto companies lies in the market depth, valuation premium, and global brand endorsement provided by exchanges like Nasdaq, which are crucial for enhancing industry credibility and attracting traffic.

Sean: Circle's peak daily trading volume reached $26 billion, exceeding the total liquidity of all tokens except BTC and ETH.

The recent surge of crypto companies going public in the U.S. is mainly based on:

• Optimized regulatory environment
• Valuation advantages of U.S. stocks (e.g., Circle's market cap exceeds USDC issuance)
• Stronger brand premium effects

Joy: Market feedback shows a phenomenon: even some high-quality crypto projects with annual revenues of tens of millions of dollars and stable cash flow struggle to have their market cap, liquidity, and trading volume accurately reflect their business fundamentals after listing on crypto exchanges.

In contrast, mature capital markets like U.S. and Hong Kong stocks can more accurately reflect project value. This is the core reason why more and more Crypto Native projects choose to list in these markets.

XinGPT: As the head of the Chinese market at Lindulabs, I focus on analyzing trading data for crypto assets and U.S. and Hong Kong stocks. Based on my research experience in exchange venture capital and AI, I hold a cautious attitude towards crypto companies going public: currently, only a few areas like exchanges and stablecoins have stable cash flow, while most projects still rely on token economics.

Crypto companies with clear business models (like Circle) have greater potential for going public, while native projects (like pump.fund) face compatibility issues with traditional capital markets. The future of the industry lies in establishing a dual-channel for tokens and stocks:

• Promoting quality DeFi projects (like ARV) to go public through reverse listings
• Encouraging traditional companies to issue tokens and build innovative financial mechanisms

JT: Circle, as a bridge connecting crypto and traditional finance, has core advantages such as a mature business model, clear policy support, and stable profitability, meeting the Web3 allocation needs of institutional investors. Its global liquidity performance is outstanding; in just three days, trading volume in the Korean market reached $500 million, showcasing a capital attraction that traditional crypto markets cannot match.

Kevin: We have noticed that traditional financial institutions are showing interest in the crypto space, and we have recently received inquiries from several leading intermediary institutions regarding tokenization projects and money market funds. The core challenges these institutions face are similar to those of U.S. listings—needing to clearly articulate project structure, application scenarios, and compliance to regulatory bodies.

Question 2: What are the core compliance challenges for crypto companies going public in the U.S.? How to address the three major hurdles of regulatory classification, financial transparency, and business model compliance? What feasible compliance paths exist for companies with issued tokens?

Midori: The core compliance challenge for crypto companies going public in the U.S. lies in the determination of the securities nature, especially for companies with issued tokens. This involves two key dimensions: first, how to meet the securities determination standards like the Howey Test, and second, how to establish the required financial audit transparency.

As seen in cases like Ripple, the determination of securities nature often requires long-term argumentation. In contrast, companies with relatively simple business structures, like Sortium, have clearer paths to listing. For most crypto companies, the biggest challenge is how to transform their existing token economic models into compliant ones that meet regulatory requirements while satisfying capital market audit standards. This compliance process is essentially a key bridge for connecting crypto finance with traditional financial systems.

Jade: From a practical operational perspective, companies with issued tokens indeed face special challenges when going public in the U.S. As Midori mentioned, the key lies in constructing a compliant business structure. Currently, the Hong Kong stock market achieves the integration of crypto assets and traditional stocks through capital injection and issuance, providing a relatively convenient path.

Sean: From the perspective of U.S. listing practices, crypto companies need to meet two key conditions: a clear business structure and transparent revenue. The companies we invest in that plan to go public must improve their financial disclosures. For companies with issued tokens, the mainstream approach is to raise funds through private placements to qualified investors, similar to Sun Yuchen's acquisition of SRM.

However, the difficulty of directly going public in the U.S. for companies with issued tokens has significantly increased, with the core challenge being the determination of token attributes. Circle took years to establish the regulatory status of its stablecoin, and currently, no token-issuing company has been able to meet both the SEC and CFTC regulatory frameworks simultaneously.

Joy: The standards for U.S. stock listings are clear (e.g., net profit of $750,000 or market cap of $50 million), and revenue is not a strict requirement. The precedent of biotech companies going public without revenue indicates that market expectations are equally important.

Crypto projects share similar characteristics, but companies with issued tokens face higher thresholds and need to clearly distinguish between token issuance and public listing. The industry consensus is to simplify financing structures and prudently plan the order of listing and token issuance.

Existing cases prove that complex business structures can also go public through compliance argumentation.

Tim: Crypto companies going public in the U.S. need to overcome two major compliance hurdles: first, compliance with securities laws, which requires determining token attributes based on the Howey Test, with the project white paper becoming key evidence; second, financial disclosure standards, where the token economic white paper cannot replace the prospectus, and companies need to improve financial transparency, governance structures, and anti-money laundering systems.

For companies with issued tokens, achieving a public listing requires dual restructuring:

• Redefining token functions, separating them from the platform's finances;
• Packaging the business as a technology service company through SPV or dual-layer structures.

These two restructurings are necessary prerequisites for obtaining reasonable valuations.

JT: The crypto industry faces a dual transparency issue, namely the opacity of VC investments and the excessive transparency of on-chain data. Regulation shows a dual trend—stablecoin policies are relaxed while exchange regulations are tightening.

If a project meets the transparency standards of a public company, the listing threshold will be lowered. In the future, a "stock + token" parallel model may emerge, blurring the lines between TGE and IPO, promoting more international financing innovations.

Question 3: Will the concentration of IPOs by crypto companies accelerate the integration of Web3 and traditional finance, or will it deviate from the decentralized spirit of the crypto industry?

Tim: This is indeed a question that combines idealism with practical significance. The essence of decentralization is not to oppose capitalism but to resist monopolies and opaque operations. From a positive perspective, IPOs, by introducing regulatory transparency, can help Web3 break through niche circles and achieve industry evolution.

However, potential risks are also worth noting: VCs, bankers, and auditing firms may become new "gatekeepers" of Web3, leading to the dilution of native user rights and an institutional tendency in governance discourse. The IPO of crypto companies is essentially a double-edged sword, requiring a balance between industry development and the original intention of decentralization.

Jade: The crypto market currently faces liquidity tightening, and the phenomenon of leading projects squeezing the ecosystem is essentially a cyclical adjustment. With the Federal Reserve potentially lowering interest rates, new liquidity injections will bring opportunities for innovative projects. The integration of crypto and traditional finance has become a trend, and the "stockification" of Bitcoin indicates that IPOs may become a new path for popularization.

In the long run, compliance and decentralization will develop in parallel, and the current adjustment is a necessary stage for industry maturity.

JT: The IPO of crypto companies essentially promotes the integration of Web3 and traditional finance. The current core development path of the crypto industry—whether through account abstraction or trading solutions—pushes for financial inclusivity. When investors begin to pay attention to crypto concept stocks, they will naturally delve into their business logic, which actually completes the following market education process:

• Recognizing the network effects of crypto projects
• Discovering undeveloped innovative areas
• Gradually establishing an industry cognitive framework

Joy: Circle's market cap far exceeded expectations, jumping from an estimated $30 billion to $40-50 billion, directly driving the surge of crypto companies going public in the U.S.

The asset allocation strategies of companies in crypto are polarized: companies like Boya Interactive adopt conservative strategies (holding Bitcoin as asset reserves), leading to steady market cap growth from 2023-2024 (e.g., Boya Interactive from $220 million to $2.3 billion); while aggressive strategies like MicroStrategy (issuing bonds to increase Bitcoin holdings) lead to significant stock price volatility.

Currently, crypto concept stocks in the U.S. market mainly fall into three categories: Bitcoin allocation stocks, mining stocks, and trading service stocks. The common characteristics of these listed companies are clear cash flow, stable business, and strong compliance. However, it is worth noting that most native crypto projects do not possess these characteristics, and their development may be more suitable to remain within the crypto ecosystem.

Question 4: In the current wave of crypto companies going public, what investment opportunities can native users seize? What potential risks should they avoid?

Tim: This "buying tokens for growth" strategy is essentially a cyclical gamble, similar to the Tesla effect, with MicroStrategy becoming an alternative to Bitcoin ETFs. This strategy is highly dependent on market conditions: in a bull market, market cap inflates, and management is hailed as investment gurus; in a bear market, they face asset devaluation and backlash from investors, leading to deteriorating fundamentals.

This is more like a brand financial operation rather than a sustainable business model. Currently, companies adopting this strategy are essentially high-risk speculation dressed in compliance clothing—success is hailed as financial innovation, while failure becomes a financial black hole.

Kevin: From the perspective of market enthusiasm and fundamental analysis, Circle's IPO case is quite representative. Its stock price started at over $30 and once soared to nearly $300, but two key factors must be noted: first, the company needs to distribute half of its interest to specific institutions, and second, its market cap has significantly exceeded the actual scale of USDC. This valuation deviation reflects a somewhat irrational aspect of the market.

Recent discussions with industry veterans have also confirmed this viewpoint: even with a successful IPO, the long-term trend of the stock price still needs to return to fundamentals. This reminds us that when participating in the IPO frenzy, we must carefully assess the actual value of assets rather than merely chasing short-term market enthusiasm.

Recommended Reading:

In Turbulent Times, Can Ethereum's "Rebirth" Reach New Heights?

Circle's Strong IPO Breakthrough, Accelerated Regulation, Is the Stablecoin Battle Approaching a Watershed?

5 Crypto KOLs Share Their Growth and Challenges: Influence, Positioning, and Paths to Breakthrough

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