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Reddit reveals its BTC, ETH and MATIC holdings as it prepares for IPO

Reddit, the popular online platform that hosts millions of communities and discussions, has filed its S-1 form with the U.S. Securities and Exchange Commission (SEC) on Thursday, signaling its intention to go public in the near future.

The filing revealed some interesting details about the company’s financial performance, user base, and future plans. Among them, Reddit disclosed that it has a small amount of cryptocurrencies on its balance sheet, mainly Bitcoin and Ether.

According to the filing, Reddit invested some of its excess cash reserves in Bitcoin and Ether, and also acquired Ether and Matic, a layer-2 scaling solution for Ethereum, as a form of payment for sales of certain virtual goods, such as awards and premium memberships.

Source: Reddit

The company said that it may continue to invest in or accept cryptocurrencies in the future, but its investment policy requires approval by its board of directors for any investments in cryptocurrencies.

However, Reddit also noted that the net carrying value of its cryptocurrencies, which consisted primarily of Bitcoin and Ether, as well as all related cryptocurrency activity, was immaterial for the periods presented. In other words, it wasn’t enough to break out in the filing.

Reddit’s crypto holdings are relatively modest compared to some other companies that have embraced Bitcoin as a reserve asset, such as MicroStrategy, Tesla, and Square. However, Reddit’s involvement with cryptocurrencies goes beyond its treasury management.

The company has been experimenting with community tokens, such as MOON and BRICK, which are issued on the Ethereum blockchain and can be used to tip, vote, and access exclusive features on Reddit. The company said that these tokens are not securities and do not represent any ownership or governance rights in Reddit.

Reddit also said that it is aware of the regulatory risks and uncertainties associated with cryptocurrencies, and that it is monitoring the developments and guidance from the relevant authorities. The company said that it limited its treasury holdings to Bitcoin, Ether, and “any other cryptocurrency” which regulators such as the SEC or the Commodity Futures Trading Commission (CFTC) will likely not view as a security.

Reddit’s IPO is expected to be one of the most anticipated events in the tech industry this year, as the company boasts over 50 million daily active users and over 100,000 communities across various topics and interests. The company reported a revenue of $687 million and a net loss of $91 million in 2023, and said that it plans to use the proceeds from the offering to fund its growth and expansion.

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