Coinbase launches an ICO platform, how do investors and competitors view it?

Author: Yogita Khatri

Compiled by: Shenchao TechFlow

Last month, Coinbase acquired the angel investment platform Echo, founded by well-known crypto trader Jordan “Cobie” Fish, for about $375 million. Following that, last week, Coinbase launched its own public token sale platform, primarily targeting retail users in the United States. This series of actions clearly indicates a shift in Coinbase's business strategy. I spoke with Coinbase, competing platforms, venture capital firms, and founders to delve into the driving forces behind this transition and the future direction.

Coinbase's timing choice: Why now?

Coinbase's move raises an obvious question: why choose this moment? The company recently told me that they believe the current Trump administration (note: this should refer to the Biden administration, as the original text may be erroneous) is one of the most cryptocurrency-friendly governments in U.S. history, suggesting that the door to ICOs (Initial Coin Offerings) may be reopening, a door that has been almost entirely closed since the regulatory storm of 2017-18. The regulatory environment has indeed changed. In July of this year, SEC Chairman Paul Atkins stated that he has asked staff to propose “applicability disclosures, exemptions, and safe harbors” for ICOs, airdrops, and network rewards. This stands in stark contrast to the SEC's approach after 2017, when it viewed most ICOs as unregistered securities, forcing many projects to close or settle.

Other signals also indicate that regulatory clarity is increasing. Scott Keto, President of CoinList, mentioned the SEC's recent “No-Action Letter” regarding DoubleZero, which indicates that its 2Z token is not a security — he stated that this is an unprecedented phenomenon. DoubleZero recently conducted a public sale on CoinList, marking the first time since 2019 that the platform has opened sales to accredited investors in the U.S. Keto added that new legislation currently advancing in Congress (including the Clarity Act and the Crypto Market Structure Act) provides more confidence for companies like Coinbase, especially regarding engagement with the U.S. retail market. Additionally, Echo previously only served accredited investors in the U.S., which may also be one of the reasons Coinbase launched a platform for retail users.

Keto stated that this regulatory shift benefits all token sales platforms, not just Coinbase. When asked if CoinList would allow U.S. retail users to participate, he said the final decision lies with the issuer: “During the era of former SEC Chairman Gary Gensler, it wasn't that we couldn't offer token sales to Americans (even qualified investors), but rather that the project parties deemed the risks too high.” He said, “If the project parties want to offer their tokens to U.S. retail users, we can support that.”

Different strategies of competitors

Other competing platforms have also seen the same regulatory opportunities but have taken different paths. Legion co-founder Matt O’Connor stated that the platform plans to serve the U.S. retail market and believes that under the updated policy framework, “securities laws should not apply to most tokens.” In contrast, BuidlPad founder Erick Zhang stated that he still does not plan to target U.S. users.

However, the driving force behind this change is not just regulatory factors. Scott Shapiro, head of Coinbase's trading division, stated that the goal is to support every stage of a project's “lifecycle” — from early financing by the Echo group, to the crypto-native public sale of Echo Sonar, and to the widespread distribution to Coinbase's global retail users. Shapiro's vision is to provide a full-stack, founder-friendly path from project inception to liquidity realization, focusing not only on quick sales but also on the “long-term healthy development of the project.”

Vertical Integration and Competitive Advantage

Brandon Potts, a partner at Framework Ventures, stated that Coinbase is just trying to gain control over more of the user journey, as users increasingly wish to get involved earlier, while issuers are looking for compliant and more trustworthy platforms. Anirudh Pai, a partner at Robot Ventures, referred to this as vertical integration: if Coinbase wants to dominate the centralized trading and on-chain economy through Base, it needs a direct token distribution channel.

Some founders have interpreted this change from a competitive perspective. Francesco Renzi, co-founder and CEO of Superfluid, stated that token issuance is still one of the highest volume moments for any exchange, and Coinbase's conservative first-day listing strategy means it “missed out” on this market. Lluis Bardet Alvarez, co-founder of idOS, pointed out that with the increase in trading volume on decentralized exchanges and the decrease in on-chain fees, centralized exchanges are facing an “innovator's dilemma.” He said, “Coinbase is exploring new crypto products that will not directly cannibalize its core product (the centralized exchange) while attracting those users who are more inclined to decentralization.”

What does Coinbase's new move mean for its competitors?

Most competitors view Coinbase's acquisition of Echo and the launch of a public token sale platform as a form of recognition, while also bringing some competitive pressure. CoinList's president Scott Keto stated that this proves the regulatory environment has finally shifted enough for major platforms to re-enter the U.S. token issuance space—a space that has been avoided by many platforms for years. He added that CoinList is currently preparing a more decentralized sales mechanism to provide projects with alternatives beyond centralized platforms.

Keto said, “We are moving in another direction because I believe this is what the project parties and users will ultimately care about. The project parties want users to stay on their own chains and within their applications. CoinList is dedicated to and ready to integrate these networks. We are about to reach some similar collaborations.”

Matt O’Connor, co-founder of Legion, stated that while Coinbase's actions have increased some competition, they have not squeezed the survival space of other platforms. He noted that Legion positions itself more like an underwriter for ICOs rather than just a distribution channel—working closely with project teams, focusing on structural design, compliance, and marketing strategies. He said, “Tokenization is a powerful technology, and its potential market is not limited to a few altcoins, but rather brings all assets and investment opportunities on-chain. This is redefining the IPO (Initial Public Offering). That’s also why we refer to Legion as the first ICO underwriter.”

Erick Zhang, the founder of BuidlPad, stated that his platform will continue to focus on non-US markets and adopt a “highly selective and highly engaged” model, spending months with project teams to cultivate communities and conduct pre-launch marketing activities. He said, “This means we cannot frequently conduct token issuances - but this is the path we have chosen.”

Most of the people I talked to believe that Coinbase may win some partnerships with high-quality projects, but not all of them. They said that platforms offering more “degen” (i.e., high-risk, high-speculation) issuance mechanisms, looser compliance requirements, or more favorable terms for founders will still have a place in the competition for strong projects. Anirudh Pai, a partner at Robot Ventures, said, “Some platforms may build their brand around memecoins and higher-risk, more speculative tokens.”

Can Coinbase lead a new wave of ICOs?

Coinbase stated that its goal is to conduct a token issuance once a month, but Scott Shapiro, head of the trading department, emphasized that this is not a “hard rule”; they focus more on quality than quantity. Although the pace of high-quality project issuances has been relatively slow this year, many believe that significant growth may occur next year as teams that previously delayed their issuances gradually take action.

Brandon Potts, a partner at Framework Ventures, stated: “Currently, there is a backlog of many high-quality projects that are delaying their release not due to a lack of confidence, but because the options for release scenarios are limited and not stable enough.”

Others expect that with Coinbase's participation, market activity will increase—although not to the extent of the massive ICO frenzy seen in 2017. The team will leverage clearer regulations and the reopening of the U.S. retail market to drive growth. Legion co-founder Matt O’Connor stated, “After Coinbase announced this news, we received more proactive inquiries from top projects and institutional partners. The ICO boom is back, but it has evolved from the 2017 model into a more sustainable and resilient form.”

Vinayak Kurup, head of research and investor at EV3 Ventures, also expressed agreement: “Since the early ICO era, we as an industry have made significant progress.” He added that the next phase will be driven by fundamentals rather than speculation. As institutional capital gradually enters the blockchain, cryptocurrencies as an asset class are being treated more seriously. He said, “The era of pure speculation in the market, I believe, has become a thing of the past.”