Some things are best left a mystery — at least as far as Coinbase is concerned.
The San Francisco-based cryptocurrency exchange has been preparing to go public since last year, and in a Thursday prospectus filed with the Securities and Exchange Commission (SEC) it listed a number of issues that could harm its business. Notably, one of those risk factors is the future identification of Satoshi Nakamoto.
For the unaware, Satoshi is the pseudonymous creator of Bitcoin. Satoshi, whose true identity has never been confirmed, published a 2008 white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” and is believed to hold the private keys to around 1.1 million bitcoin. Over the years there have been various efforts to discover Satoshi’s true identity, but as far as anyone can tell they have all come up short.
Coinbase is hoping it stays that way.
In the risk section of its prospectus, Coinbase explains that its business is tied to the bitcoin market itself (the exchange made a majority of its net revenue off bitcoin and ethereum transaction fees in 2020), and that Satoshi’s identity remaining hidden is tied to the health of that market.
“[In] addition to the factors impacting the broader cryptoeconomy described in this section, our business may be adversely affected if the markets for Bitcoin and Ethereum deteriorate or if their prices decline, including as a result of the following factors,” notes the prospectus. One of those following factors just so happens to be “the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins[.]”
Other listed risk factors seem more intuitive, and include hacks, hard forks, or future technological developments that break Bitcoin’s cryptography.
Coinbase, which insists in the prospectus that as a “remote-first company” it doesn’t have a headquarters, is currently valued around $100 billion ahead of its direct listing. As of the time of this writing, Satoshi’s supposed 1.1 million bitcoin are worth around $51.6 billion.