The Purpose Behind Coincheck's Aim for a U.S. IPO

As explained on the previous page, cryptocurrency exchanges are beginning to aim for stock listing in order to gain the trust of institutional investors. However, initial public offerings (IPOs) take a lot of time and money. Therefore, a method that is currently attracting attention is listing on the US market using a special purpose acquisition company (SPAC).

SPAC is translated as "special purpose acquisition company" in Japanese. As the name suggests, it is a paper company established for the purpose of acquiring a company and does not conduct any particular business. SPACs are often established with the capital of well-funded investors or well-known managers, and the entity that establishes a SPAC is called a "sponsor."

The sponsor's purpose is to list a promising and attractive company (called a target company) that is not listed on the stock market and earn dividends. The sponsor uses their track record and name recognition to list the SPAC they established on the stock market and raise funds from general investors.

Once the funds are raised, they acquire and merge the target company, and then change the name of the listed SPAC to the target company. In this way, the target company is listed on the stock market as is.

By using a SPAC as an intermediary, the strict screening process for listing is simplified, so even companies in venture and cryptocurrency industries, whose creditworthiness and growth potential are still unclear to investors, can list and raise funds relatively easily. Above all, the simplified screening process significantly shortens the time it takes to list.

SPACs are also being used by Monex Group, which has been in the news, to list its subsidiary Coincheck Inc. on the NASDAQ.

Coincheck's SPAC, Thunder Bridge Capital Partners Ⅳ, Inc., will acquire and merge the target company, Coincheck Group B.V., which is scheduled to become Coincheck's holding company. Once the business integration is complete, the company will change its name to Coincheck Group N.V. and operate in the Netherlands.

Characteristics of SPACs

• At the time of listing, they are paper companies
• The purpose is to acquire and merge private companies and list them
• In the United States, investment funds are protected by investor protection regulations