The Breakdown - Kraken’s $15B Secret Raise and the Race to IPO

Episode Date: September 30, 2025

Fortune revealed that Kraken quietly raised $500 million at a $15 billion valuation—its first significant raise in over a decade—as the exchange eyes a 2026 IPO. Bloomberg followed up with reports of another potential $200–300 million round at a $20 billion valuation. We dig into what this means for Kraken’s future, the escalating scale of Tether’s $500 billion fundraise, growing scrutiny of crypto treasury companies, and SEC Commissioner Hester Peirce’s farewell vision for a new era of crypto regulation. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Monday, September 29th, and today we are talking about Cracken's Secret fundraising. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Well, friends, Crackin has closed a huge secret fundraising deal as they prepare to IPO.

On Friday, Fortune reported that Cracken had raised $500 million at a $15 billion valuation. Now, the sourcing was very strange, with crypto editor Jeff John Roberts writing, This week, Fortune learned from a person who was not authorized to discuss the matter publicly that it successfully closed the round this month. The round featured no primary investor with Cracken itself setting the terms, including the $15 billion valuation. He added that contributions came from investment managers and venture capitalists without naming any names, save for co-CEO Argent Sethy in his personal capacity and through his fund tribe capital. This is the first time Cracken has raised money in their 14-year history, aside from an

early stage check of 27 million. So the round provides the first independent valuation of the exchange in over a decade. The reporting came as part of an extensive profile of Sethy, which had Roberts conducting an interview in Sethy's living room. It discussed the shake-ups in Cracken's executive suite at Length, concluding that they had been largely responsible for the IPO getting pushed back into 26. Citing a former executive, Roberts wrote, Cracken's many years in business had resulted in more pre-IPO regulation and operational issues than other firms.

That former executive had formed the view that Sethi's disruptive management style was necessary to getting the company prepared to go public. Roberts noted that the pressure is on for Cracken to IPO sooner rather than later. Given this year a string of crypto-IPOs are seeing less and less exuberance, there is a strong argument that Cracken should move up their timeline. Sethi, on the other hand, seems content to IPO when the time is right and not race to catch a window that may have already passed. He referenced strong growth both domestically and internationally, a profitable business model, and deep liquidity as reasons the exchange is built for the long term, rather than rushing for the public exit. Now, shortly after the Fortune reporting went live, Bloomberg followed up with news that Cracken was in advance talks with another strategic investor.

That additional fundraising would see Cracken take on $200 or $300 million at a $20 billion valuation. Bloomberg reported that the deal is not yet finalized and remains subject to market conditions. We have zero indication as of yet of who the new strategic partner is or how Cracken intends to use the additional capital. However, the Bloomberg source noted that this additional raise, quote, would mark a significant step up in how private markets are pricing crypto's larger incumbents. Now, the current rumor is that Cracken is still aiming to IPO in the first quarter of next year, and the rapidly escalating private rounds suggests the company will see big demand whenever they decide to go public. As Crypto Armaida wrote, Cracken IPO is going to

be lit. Now, staying on the fundraising tip for a minute, to the surprise of absolutely no one, Tether is fielding huge interest in their mammoth fundraising round. Last week, it was reported that Tether was seeking fundraising at a $500 billion valuation and would consider taking as much as $20 billion from investors. On Friday, Bloomberg reported that SoftBank and Kathy Woods Ark are among several high-profile investors looking to participate in the round. As we discussed last week, if the round goes through, it will be one of the defining capital markets deals of the decade. A $500 billion dollar valuation would put Tether on par with OpenAI as the most highly valued private company in history. It would also make Chairman Giancarlo Devasini the world's fifth wealthiest person

at $224 billion, putting him ahead of Warren Buffett. CEO Paulo Arduino and his predecessor, John Luis Vanderveld, would also rank in the top 20 for wealth at around $95 billion. Now, Friday's reporting really just serves to cement what we already knew. Now that the regulatory haze is clearing in the U.S., Tether has become a highly investable company that should have no trouble setting the terms of this deal. Still, though, there is a lot of cope from the tether skeptic circles, with many questioning whether they need to raise money and keeping the conspiracy theories alive. A new one this week discussed reporting that Argentina's $4.5 billion worth of gold had been sent outside of the country and could be subject to seizure if the nation defaults.

The Argentinian government is currently being very tight-lipped about where the gold reserves are being held. The tether cranks noted that the company's gold reserves had a billion-dollar bump that coincided with Argentina rearranging their holdings. There is not much to go on, and we are deep into tinfoil hat territory at this stage. But despite all of this, Tether is now a player on the global monetary stage. Jeff Park, the CIO of ProCap Bitcoin tweeted, Tether is a central bank, strategy is a central bank, Worldcoin is a central bank. The biggest opportunity in crypto is, and always has been, to become a central bank you can own. Now, speaking of strategy, crypto treasury companies have recently hit a rough patch, but some believe the theme still has legs.

Blockchain.com CEO Peter Smith is still a bull, commenting, more and more are going to come until we run out of management teams or shells. Capitalism is awesome like that. At some point, though, we sort of run out of steam, and then it gets really interesting because you'll see a lot of consolidation. The really good management teams and sponsors will consolidate a lot of the space at a preferential capital stack. Blockchain.com has made over 200 million worth of Crypto Treasury company investments scattered across a dozen different plays. After being pummeled for weeks, both Microstratory and BitMinds saw minor upticks on Friday, so perhaps there's a little more juice left. Others are pretty clear that they think it's over. Komodo CTO, Caden Stadleman,

recently called the trend self-dealing dressed up as capital deployment. The SEC evidently has their own concerns along those lines. On Friday, the Wall Street Journal reported that the SEC and Associated Self-regulatory Organization FINRA had reached out to some companies within the crypto treasury company space. The inquiries focused on unusual trading patterns, including abnormally large volumes and large price increases ahead of public announcements about crypto purchases. The reporting stated that the SEC had officially cautioned some companies about potential violations of fair disclosure regulations. Those regulations require companies to share material non-public information widely rather than selectively with analysts, investors, or other market

participants. In plain terms, the SEC and FINRA are looking around for evidence of insider trading from the crypto treasury companies. We don't have the names of any specific targets or have any suggestion on how an investigation will conclude, but the reporting could put a damper on the feeling that the rules of U.S. capital markets no longer apply. Mike Dudas of Sixth Man Ventures, who has likely seen how the sausage is made here, tweeted, this is going to be a bloodbath, and this is exactly the right type of enforcement work the SEC should be doing. Speaking of the SEC, SEC Commissioner Hester Purse has heralded the start of a new era for crypto, but hopes the industry is ready to move on from its old ways.

In a speech at Coin Center's annual dinner, SEC Commissioner Hester Purse has heralded the start of a new era in crypto, but hopes the industry is ready to move on from its old ways. In a speech at CoinCenter's annual dinner, Perse apologized for the past few years. She said, I am sorry that over most of my tenure at the SEC, I failed to convince my colleagues in government to give you a chance. I hope that you and others whom you have inspired will use this time, a time in which regulatory clarity has replaced ambiguity as government's objective, to build good things that will enhance the safety, security, happiness, and prosperity of your family, friends, neighbors, and nation.

During this administration, Pierce has led from the front and championed root and branch reform. To her credit, we're starting to see policies put into action, and crypto startups get the latitude to operate more freely than ever before. While on stage, purse wore a shirt emblazoned with the code to operated decks. She remarked, the way the old SEC was trying to contort the law merely wearing this shirt, which reprints code, including a coin center comment letter, would have been enough to require me to register as an exchange. The SEC has moved on from such legal contortions, happy news for all except those with an inordinate affection for intermediaries.

The speech was something of a culminating address from Perce, whose time is up at the SEC in June. Joking about what's next, Purs had a few jabs for the industry. She said, For post-SEC life, I must turn to Plan C, or more precisely plan NFT. My NFT collection is going to be a set of characters that I have encountered in the world of crypto, especially at its current, often uncomfortable intersection with policy. Perst described the collection, including herself-styled as crypto-mom, terrified Tradfai, a crypto-twiter called Hypertyper, and the Ornery Maxi. The Maxi, of course, bears the slogan, outlaw all crypto assets except, insert name of his

favorite crypto asset. While Perst was then pooting the industry that has taken up her time in political capital over the past seven years at the SEC, her speech did contain a genuine plea. Framed as motherly advice, Perth implored the industry not to take this window of regulatory freedom for granted. She told the audience of industry figures, you have built or are building solutions to seemingly intractable problems. You have ignored the noise so that you could think deeply about how to improve people's lives, and you may have faced government investigations for doing so. Show the skeptics that technology that enable us to engage permissionlessly and

privately with our peers are worth preserving and celebrating. Building valuable things in this moment when government is not trying to stop you is the best way to ensure the durability of sound crypto policy. ZK Sync developer Vacillis commented, this is one of the coolest pro-innovation in most American speeches I have read. The fact that it's about crypto makes me even more excited. Jake Trevinsky summed up the feeling of many writing, We don't deserve Hester Purse, the best of the best. That's the tweet.

And that, my friends, is the show. Appreciate you listening, as always, and until next time, be safe and take care of each other. Peace.