Former Coinbase CTO: Traditional IPOs and mergers are hindered, and security token offerings (STOs) on the blockchain may become a new financing path

ChainCatcher news, former Coinbase CTO Balaji stated that as traditional IPO and merger & acquisition (M&A) paths are obstructed, Security Token Offerings (STO) on the blockchain may become a new avenue for tech companies to raise funds. He pointed out that the SEC's regulatory rules make it difficult for small companies to go public, and the recent tough stance of the Federal Trade Commission (FTC) on large-scale mergers further limits the exit routes for startups. This policy environment may weaken the funding flow and competitiveness of the startup ecosystem.

However, he believes that changes in the crypto policy landscape have opened the door for STOs, and the new government's supportive attitude towards cryptocurrencies makes blockchain-based financing models more attractive. STOs can not only reduce the listing costs for small businesses but also provide startups with a source of capital independent of large tech companies. Balaji emphasized that this model aligns with the government's goal of keeping small businesses independent while also offering global investors the opportunity to participate without directly owning control of the enterprise.