OKX’s IPO bet

Author: Prathik Desai; Translator: Block unicorn

Foreword

Mr. Kennedy made his fortune in the liquor business during Prohibition (a period from 1920 to 1933 when the sale, production and distribution of alcohol was prohibited in the United States), and after Prohibition ended, he became the first chairman of the Securities and Exchange Commission. President Roosevelt is said to have said of the appointment: "Let the thief catch the thief." Kennedy then cleaned up Wall Street with a reformed zeal, implementing rules that still regulate securities markets to this day.

A similar story in the modern cryptocurrency space is OKX's transformation from a regulatory pariah to a potential IPO candidate.

According to a report on Sunday, Seychelles-based cryptocurrency exchange OKX is considering a public listing in the United States, just four months after agreeing to pay a $505 million fine to the U.S. government for operating without a license.

In February 2025, the world's second-largest centralized exchange (CEX) admitted to processing more than $1 trillion in unlicensed transactions involving U.S. users while knowingly violating anti-money laundering laws, agreeing to pay a massive fine of more than $500 million. Now, they want to invite American investors to buy shares in the company.  

Nothing says "we have turned over a new leaf" more than voluntarily submitting to the quarterly earnings calls, disclosures, and filings required by the U.S. Securities and Exchange Commission (SEC).  

Can a cryptocurrency company succeed on Wall Street? Circle recently proved that it is possible. Over the past few weeks, the USDC stablecoin issuer has shown that investors will enthusiastically throw money at crypto companies if they follow the compliance route. Circle’s stock price has soared from $31 to nearly $249 in just a few weeks, quickly creating billionaires and setting a new template for cryptocurrency IPOs. Even Coinbase, the largest cryptocurrency exchange in the United States, has risen 40% in the past 10 days and is trading near a four-year high. Can OKX achieve similar success with exchanges? Circle’s regulatory record is very clear when it comes to listing. They have been wearing suits, testifying at congressional hearings, and publishing transparency reports for years. Meanwhile, OKX recently admitted to facilitating $5 billion in suspicious transactions and proceeds of crime, and has had to promise hard not to repeat the same mistakes.

Different CEXs, Different Stories  

To understand OKX's IPO prospects, let's look at Coinbase, the only major cryptocurrency exchange that has successfully entered the public market. OKX and Coinbase make money in the same way: by charging fees on every cryptocurrency transaction.  

When the crypto market is crazy, such as the bull market, they can make a lot of money. Both platforms provide basic cryptocurrency services: spot trading, staking, and custody services. However, their business development methods are very different.  

Coinbase took a compliance-first route. They hired former members of regulators, built institutional-grade systems, and spent years preparing for an IPO on Wall Street. The strategy worked, and they went public in April 2021, and despite the ups and downs of the crypto market, they are now valued at more than $90 billion.  

Coinbase averages $92 billion in monthly spot volume in 2024, mostly from US customers who pay high fees in exchange for regulatory certainty. This is the tortoise strategy: slow, steady, and focus on doing one market well.  

OKX has chosen the hare strategy: move fast, grab global market share, and worry about regulation later. From a business perspective, this strategy is very successful.  

OKX averages $98.19 billion in monthly spot volume in 2024, 6.7% higher than Coinbase, serving 50 million users in more than 160 countries. Add in their derivatives trading (they have a 19.4% share of the global market), and OKX processes far more crypto trading than Coinbase.  

OKX averages about $2 billion in daily spot volume and more than $25 billion in derivatives, compared to Coinbase’s $1.86 billion and $3.85 billion, respectively.  

But the speed boost comes with a cost boost. Coinbase has built a good relationship with U.S. regulators, while OKX has aggressively courted U.S. customers despite being banned from operating in the U.S. Their attitude seems to be “ask for mercy, not permission,” which works until you have to ask the Department of Justice for mercy.

There’s a problem: Crypto exchanges’ revenues are completely dependent on people continuing to enthusiastically trade cryptocurrencies. When the market is hot, exchanges make a ton of money. When the market cools, revenues can plummet overnight.  

For example, combined spot and derivatives volumes on exchanges fell more than 50% in June 2024 from a peak of about $9 trillion in March.

OKX’s $500 million settlement became a forced education in how U.S. financial markets actually work. They appear to have learned from their costly mistakes. They hired former Barclays executive Roshan Robert as U.S. CEO, opened compliance offices in San Jose, New York, and San Francisco, hired 500 people, and started talking about building an “industry-defining super app,” corporate language that suggests they are serious about reform.

It will be interesting to see whether investors buy into this redemption narrative.  

Valuation Game

Based on trading volume, OKX’s valuation should theoretically be comparable to or even higher than Coinbase.  

Coinbase’s market cap is roughly a single multiple of monthly trading volume, with an average monthly volume of $92 billion and a market cap of over $90 billion. OKX’s monthly volume is $98.19 billion, 6.7% higher than Coinbase. Using the same multiple, OKX’s valuation would be $85.4 billion.  

However, valuation is not just a matter of math, it’s also about perception and risk.  

OKX’s regulatory baggage could result in a valuation discount. Their international presence means profits depend on a rapidly changing regulatory environment, as they have discovered in Thailand, where regulators just banned OKX and several other exchanges.

Applying a 20% “regulatory risk discount” would put OKX at a potential valuation of $68.7 billion. But given their global reach, dominance in derivatives, and higher trading volumes, their valuation premium is justified.

Fair valuation range: $70 billion to $90 billion, depending on how much investors value growth vs. governance.  

Strengths

OKX’s investment appeal is based on several competitive advantages that Coinbase lacks.  

Global scale: While Coinbase is primarily focused on the U.S., OKX serves markets where cryptocurrency adoption is surging: Asia, Latin America, and parts of Europe where traditional banking is underdeveloped.  

Derivatives Dominance: OKX controls 19.4% of the global crypto derivatives market, while Coinbase’s derivatives business is minuscule. Coinbase’s recent announcement of perpetual swaps means OKX will face stiffer competition from established and regulated players like Coinbase.

Volume Lead: Despite being a private company with recent regulatory issues, OKX’s spot trading volume exceeds that of publicly listed Coinbase.  

Coinbase has its advantages, too — a clean regulatory record and strong relationships with institutional investors who prefer predictable compliance costs over a global growth story that comes with regulatory complexity.  

What Could Go Wrong  

The risks facing OKX are huge and different from typical IPO concerns.  

Regulatory Sudden Change: OKX operates in dozens of jurisdictions where rules change quickly. The Thailand ban is just the latest example. Any major market can lose a significant amount of revenue overnight.

Market Cyclicality: Crypto exchange revenues rise and fall with trading activity. When crypto markets are quiet, exchange revenues can plummet.  

Reputational Risk: Despite the settlement, OKX could still suffer significant reputational damage from a regulatory scandal. Crypto exchanges are inherently risky businesses, and a technical glitch or security breach could destroy customer confidence overnight.  

Our View 

OKX’s potential IPO could be a fascinating test of whether public markets will overlook the exchange’s troubled background.  

Regulatory drama aside, OKX actually has advantages over Coinbase, the only crypto exchange to successfully go public. They dominate derivatives trading and have a global customer base.  

Whether OKX has learned from its mistakes (expensive lessons often stick) may not matter. What really matters is whether public market investors are willing to pay growth multiples for a company operating in dozens of unpredictable regulatory environments. Coinbase built a moat of U.S. compliance credentials; OKX built a global trading empire and is now building a compliance makeover around it.  

Both strategies can work, but they appeal to very different investors. Coinbase is a safe bet for institutional investors seeking regulated crypto exposure. OKX could appeal to investors who see crypto’s future as global adoption and sophisticated trading products. Circle proved investors are willing to put money down for clean crypto stories. OKX is betting investors will do the same for them, even if they come with a complicated past. Whether OKX’s reformist image resonates with public markets will reveal how much investors really value growth and governance in crypto.