US-based cryptocurrency exchange Kraken is reportedly contemplating a final round of funding as it explores the prospect of an initial public offering (IPO), according to sources familiar with the matter. The exchange has attracted interest from potential investors amid the ongoing surge in the digital asset market.

Kraken Prepares for Pre-IPO Funding Round

As per a report by Bloomberg, sources indicate that Kraken is likely aiming to secure over $100 million in funding. The renewed investor interest, coupled with perceived changes in US regulatory attitudes towards digital assets, has revived discussions about crypto sector companies going public. Just recently, Bitcoinist also reported Robinhood's acquisition of another crypto exchange, Bitstamp.

Kraken has been considering an IPO since at least 2021. The funding round, potentially designated as a pre-IPO round, is anticipated to be finalized by year-end, according to one source.

Founded in San Francisco in 2011 and operating under its parent company Payward, Kraken has reiterated its commitment to accelerating global cryptocurrency adoption.

While Kraken has expressed intentions of going public for several years, previous market downturns and regulatory hurdles, including ongoing legal disputes with the US Securities and Exchange Commission (SEC), have impeded its progress.

Kraken resolved one case with the SEC in 2020 but remains embroiled in another case, accused of operating an unregistered securities broker-dealer, clearing agency, and exchange. The company refutes these allegations.

Favorable Regulatory Climate

In recent months, US regulators and politicians have shown a more positive stance towards cryptocurrencies, with crypto becoming a prominent issue in the race for the White House.

The US SEC's endorsement of exchange-traded funds (ETFs) investing in Bitcoin and its steps towards approving similar funds for Ethereum indicate a growing acceptance of digital assets.

According to Bloomberg, with the year-long surge in crypto prices, Kraken is projected to generate revenue between $1 billion and $2 billion this year, according to insiders.

In comparison, Coinbase, the largest US crypto exchange that went public through a direct listing in 2021, is estimated to achieve revenue of $5.9 billion, as compiled by Bloomberg analysts.

Kraken is actively seeking a board member to facilitate a successful IPO, potentially as early as next year. Discussions thus far have involved informal exchanges of terms and valuations, without formal documentation.

The total crypto market capitalization presently stands at $2.5 trillion, while Bitcoin, the largest cryptocurrency, is consolidating above the crucial $70,000 threshold on the daily chart.