Coinbase launches ICO platform, what do investors and competitors think?

Author: Yogita Khatri

Translation: TechFlow

Last month, Coinbase acquired Echo, an angel investing platform founded by prominent crypto trader Jordan "Cobie" Fish, for approximately $375 million. Shortly after, last week, Coinbase launched its own public token sales platform, primarily targeting retail users in the United States. These moves clearly signal a strategic shift in Coinbase's business. I spoke with Coinbase, competing platforms, venture capital firms, and founders to explore the drivers behind this transformation and what lies ahead.

Coinbase’s Timing: Why Now?

Coinbase’s actions raise an obvious question: Why now? The company recently told me it views the current Biden administration as one of the most crypto-supportive governments in U.S. history, suggesting that the door to ICOs (initial coin offerings) may be reopening—after being nearly shut since the regulatory crackdown of 2017–18. Indeed, the regulatory landscape has shifted. In July, U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins said he had asked staff to develop recommendations on “applicable disclosures, exemptions, and safe harbors” for ICOs, airdrops, and network rewards. This marks a stark contrast to the post-2017 era when the SEC treated most ICOs as unregistered securities, forcing many projects to shut down or settle.

Other signals also point to increasing regulatory clarity. CoinList President Scott Keto cited the SEC’s recent No-Action Letter to DoubleZero, which stated that its 2Z token is not a security—he called it unprecedented. DoubleZero recently conducted a public sale on CoinList, marking the first time since 2019 that the platform has offered a sale to accredited U.S. investors. Keto added that new legislation currently advancing in Congress, including the Clarity Act (Crypto Market Structure Bill), gives companies like Coinbase greater confidence, especially regarding access to U.S. retail markets. Previously, Echo served only accredited U.S. investors, which may partly explain why Coinbase is launching a retail-focused platform.

Keto said this regulatory shift benefits all token sale platforms, not just Coinbase. When asked whether CoinList would allow U.S. retail participation, he said the final decision rests with issuers: “Under [former SEC Chair Gary Gensler], it wasn’t that we couldn’t offer token sales to Americans—even accredited ones—it was that projects viewed the risk as too high.” He added, “If a project wants to offer its tokens to U.S. retail users, we can support that.”

Divergent Strategies Among Competitors

Other platforms see the same regulatory opportunity but are taking different paths. Legion co-founder Matt O’Connor said his platform also plans to serve U.S. retail investors and believes that under updated policy frameworks, “securities laws should not apply to most tokens.” In contrast, BuidlPad founder Erick Zhang said he still does not intend to target U.S. users.

Yet regulation isn’t the only driver. Scott Shapiro, head of Coinbase’s trading division, said the goal is to support “every stage of a project’s lifecycle”—from early funding via Echo groups, to crypto-native public sales through Echo Sonar, to broad distribution among Coinbase’s global retail user base. Shapiro’s vision is a full-stack, founder-friendly path from inception to liquidity, focusing not just on quick sales but on the “long-term health of the project.”

Vertical Integration and Competitive Edge

Brandon Potts, partner at Framework Ventures, said, Coinbase is simply trying to capture more of the user journey, as users increasingly want earlier access and issuers seek compliant, trusted platforms. Anirudh Pai, partner at Robot Ventures, described it as vertical integration: If Coinbase wants to dominate both centralized exchanges and on-chain economies via Base, it needs a direct token distribution channel.

Some founders interpret this move competitively. Francesco Renzi, co-founder and CEO of Superfluid, said token launches remain among the highest-volume events for any exchange, and Coinbase’s conservative listing strategy meant it “missed out” on this space. Lluis Bardet Alvarez, co-founder of idOS, noted that with rising decentralized exchange volumes and falling on-chain fees, centralized exchanges face an “innovator’s dilemma.” He said, “Coinbase is exploring new crypto products that won’t directly cannibalize its core offering (the centralized exchange), while attracting users who lean toward decentralization.”

What Does Coinbase’s Move Mean for Competitors?

Most competitors view Coinbase’s acquisition of Echo and launch of a public token sale platform as validation, along with some competitive pressure. Scott Keto, president of CoinList, said it confirms that the regulatory environment has finally shifted enough for major platforms to re-enter U.S. token issuance—a space many have avoided for years. He added that CoinList is now preparing a more decentralized sales mechanism to offer projects an alternative to centralized platforms.

Keto said: “We’re moving in another direction because I believe that’s ultimately what projects and users will care about. Projects want users to stay on their own chains and within their apps. CoinList is committed and ready to integrate with these networks. We’re close to finalizing several such partnerships.”

Legion co-founder Matt O’Connor said Coinbase’s move adds competition but doesn’t squeeze out other platforms. He said Legion positions itself more as an ICO underwriter than just a distribution channel—working closely with projects on structure, compliance, and go-to-market strategy. He said: “Tokenization is a powerful technology whose potential market isn’t limited to a few altcoins, but extends to bringing all assets and investment opportunities on-chain. This is redefining IPOs. That’s why we call Legion the first ICO underwriter.”

BuidlPad founder Erick Zhang said his platform will continue focusing on non-U.S. markets and maintain a “highly selective and high-touch” model, spending months with projects building communities and running pre-launch marketing campaigns. He said: “This means we can’t do token launches frequently—but that’s the path we’ve chosen.”

Most people I spoke with believe Coinbase may win partnerships with some top-tier projects, but not all. They said platforms offering more “degen” (i.e., high-risk, highly speculative) launch mechanisms, looser compliance requirements, or more founder-friendly terms will still have a place in the race for strong projects. Anirudh Pai, partner at Robot Ventures, said: “Some platforms might build their brand around memecoins and higher-risk, more speculative tokens.”

Can Coinbase Lead a New Wave of ICOs?

Coinbase said it aims to conduct one token launch per month, but trading division head Scott Shapiro emphasized this isn’t a “hard rule,” and they prioritize quality over quantity. While high-quality project launches have been slow this year, many believe there could be significant growth next year as teams that previously delayed their launches begin moving forward.

Brandon Potts, partner at Framework Ventures, said: “There’s a large backlog of high-quality projects that delayed launches not due to lack of confidence, but because launch options were limited and unstable.”

Others expect increased market activity with Coinbase’s entry—though not a repeat of the 2017-scale ICO frenzy. Teams will leverage clearer rules and reopened access to U.S. retail markets to drive progress. Legion co-founder Matt O’Connor said: “After Coinbase announced this, we received more inbound interest from top projects and institutional partners. The ICO wave is back, but it has evolved from the 2017 model into something more sustainable and resilient.”

Vinayak Kurup, research lead and investor at EV3 Ventures, agreed: “As an industry, we’ve made significant progress since the early ICO days.” He added that the next phase will be driven by fundamentals, not hype. With institutional capital gradually entering on-chain ecosystems and crypto being taken more seriously as an asset class, he said: “The era of pure market speculation, I believe, is behind us.”