- Coinbase revealed its documents to go public through a direct listing on Thursday.
- In the filing, the trading platform cites Satoshi Nakamoto’s identity as a potential risk factor.
- The creator’s cache of bitcoins could wreak havoc on the market if Nakamoto sold his collection.
- Visit the Business section of Insider for more stories.
Coinbase revealed documents to go public on the Nasdaq stock exchange via a direct listing on Thursday.
In the filing, the digital trading platform listed bitcoin’s creator Satoshi Nakamoto as a potential risk factor. Coinbase cites the identification of Nakamoto — the pseudonym used by the individual or group of people who created bitcoin — as a potential risk for the platform.
If the identity of the creator of bitcoin was revealed, it could cause bitcoin prices to deteriorate, according to the filing.
The filing also referenced Nakamoto’s personal stash of bitcoins that total over one million. As of February, one bitcoin is worth around $50,000.
Nakamoto could negatively impact Coinbase, the company said, and destabilize the entire crypto market if the creator decided to transfer his bitcoins, which are currently valued at over $30 billion.
Nakamoto was the first person to ever mine for bitcoins and his stake in the digital currency accounts for nearly 5% of the entire bitcoin market, as there are only 21 million bitcoins that can be mined.
Bitcoin’s value has largely been driven by its deflationary tendencies. If 1.1 million bitcoin were released into the market, the digital currency’s price would almost surely fall.
Similarly, bitcoin has been praised for the decentralized nature of trading on the platform. The currency is not beholden to any institutions or individuals. If Nakamoto was unmasked, it would place the trading platform under a single entity, potentially discouraging traders that bought into the currency for its decentralization.
Coinbase’s success is largely tied to bitcoin’s rise
In a symbolic nod to the bitcoin creator, Coinbase listed Nakamoto as one of the recipients of its public filing.
Coinbase — which is valued at over $100 billion — can attribute much of its success to bitcoin and its creator who developed the currency as the first decentralized digital currency in 2009.
In the years since, bitcoin has largely dominated the cryptocurrency world, rising over 400% in the past year alone to easily remain the largest digital coin by market cap.
Coinbase is poised to continue to benefit from bitcoin’s rise. The trading platform is the largest in the US and houses over 20 million users.
Coinbase founder and CEO Brian Armstrong references the invention of bitcoin in his letter that is included in the public filing.
“When I first read the Bitcoin whitepaper back in 2010, I realized this computer science breakthrough might be the key to unlock this vision of the future,” Armstrong said. “Cryptocurrency could provide the core tenets of economic freedom to anyone: property rights, sound money, free trade, and the ability to work how and where they want.”
Nakamoto’s name first came to public attention after the white paper was released. The paper outlined the principles of a decentralized peer-to-peer digital payment system. In 2011, the creator reportedly moved on from the company, but has remained a figure of public interest.
There has been much speculation over the years as to the creator’s identity. Names like bitcoin developer Nick Szabo, entrepreneur Craig Wright, and Tesla CEO Elon Musk have been dropped as potential creators of the currency.
While it is unknown whether Nakamoto will ever choose to transfer their cache of bitcoins, it seems unlikely the creator will ever reveal their true identity.
By maintaining anonymity Nakamoto could potentially avoid adverse legal consequences. The untraceable nature of bitcoin has also led to its use for illegal goods and services on the dark web. In January, US Treasury Secretary Janet Yellen called for more restrictions on digital currencies like bitcoin, due to their use in illegal financing.
The reveal would also violate one of bitcoin’s founding principles that was outlined in the white paper. If a creator was unmasked it would pose a threat to the decentralized nature of the currency — a tenet Nakamoto put at the center of his plans for bitcoin.