Reddit’s upcoming IPO filing contains surprising revelations about its crypto holdings and outlook. Reddit disclosed it holds immaterial amounts of Bitcoin, Ethereum, and Polygon in its treasury. This admission into the corporate crypto-holding club is less shocking than Reddit’s stance on Ethereum.
Based on public statements by regulators like the SEC, Reddit believes Ethereum’s native token ETH is unlikely to be deemed a security. This is significant amid the SEC’s waffling over ETH’s legal status post-merge.
While couching the determination as a risk-based judgment, Reddit is essentially stating it views ETH as a commodity rather than a security. This contrasts with most companies opting for Bitcoin-only treasury reserves to avoid regulatory scrutiny.
Reddit also outlines the risks of crypto holdings like loss of private keys and regulatory blocks on access or sale. But regulations already shape Reddit’s crypto approach.
To comply with OFAC restrictions, Reddit prevents access or transfers from sanctioned jurisdictions. Reddit also requires identity verification for certain crypto-related activities to comply with AML laws.
Overall, Reddit’s crypto posture in its IPO filing signals ETH is on firmer legal ground than other altcoins. The company’s confidence Ethereum avoids the security designation underscores its unique stature in the crypto sector.
