Former Coinbase CTO predicts STOs will be more viable than IPOs or M&As for small firms

Balaji Srinivasan, the former chief technology officer (CTO) of crypto exchange Coinbase, recently suggested on X that using a securities token offering (STO) could be easier for small firms to raise funds than traditional methods like initial public offerings (IPOs) or mergers and acquisitions (M&As) under the Trump administration. He pointed out that the Sarbanes–Oxley Act of 2002 imposed by the U.S. Securities and Exchange Commission (SEC) has made it burdensome for smaller companies to go public. Furthermore, he noted that under Lina Khan's leadership at the Federal Trade Commission (FTC), there has been a shift toward blocking major M&As to prevent large companies from overpowering smaller ones—a policy stance Srinivasan opposes but notes the Trump administration has also adopted. With the current U.S. administration being more receptive to cryptocurrency, Srinivasan argues that STOs present a viable alternative for fundraising. Unlike other methods, STOs allow global investors to back U.S.-based startups through cryptocurrencies, without taking ownership stakes, thus enabling these smaller companies to remain independent for a longer period, he said.