From private to public: digital asset firms prepare for the big leap

Digital asset firms assess readiness across 10 domains to meet public market investor expectations.

In brief

• Regulatory clarity and investor enthusiasm has accelerated interest in digital asset firms exploring the public markets via IPO.
• Operational readiness is key to optimizing transaction timing and costs, as well as preparing to operate as a successful public company.
• Digital assets exchanges, blockchain infrastructure firms and digital asset treasuries face unique challenges in the transition from private to public.

In recent years, the digital asset landscape has undergone a remarkable transformation, evolving from a niche segment into a vibrant and dynamic sector that is now capturing the attention of public markets. As we stand at this pivotal juncture, it is essential to understand the forces propelling digital asset native companies, ranging from crypto exchanges to blockchain infrastructure providers. This evolution is not merely a trend; it represents a fundamental shift in how we perceive and engage with financial assets in the digital age.

Timing is everything, market forces coalesce for an IPO market

Recent advancements such as stablecoin legislation and evolving Securities Exchange Commission (SEC) guidance have not only bolstered confidence among institutional players but have also paved the way for TradFi institutions to explore innovative strategies in tokenization and decentralized finance. This overall expansion of interest and investment in the crypto ecosystems has increased competition and the imperative for players to expand via raising capital in the public markets. The following factors are combining to accelerate interest for crypto IPOs.

• Regulatory clarity and institutional adoption:

Recent developments including stablecoin legislation, evolving SEC guidance (notably Project Crypto), and the ongoing work of the Financial Accounting Standards Board (FASB), have accelerated institutional adoption. These initiatives enable banks, asset managers and FinTechs to explore tokenization, custody solutions and Decentralized Finance (DeFi) integrations with greater confidence and compliance. Notably, 73% of institutional investors currently hold one or more altcoins beyond BTC and ETH, led by hedge funds at 80%¹.

• Surge in investor interest and strategic engagement:

With regulatory guardrails in place, digital asset native companies are experiencing heightened investor demand, securing $9.5 billion in fundraising year-to-date through August 2025, which compares to $11.4 billion raised in 2024. This influx of capital is complemented by more TradFi institutions entering the market, expanding the landscape and driving some of the year’s most notable public listings².

• Uptick in global IPO activity led by digital asset natives:

The combination of regulatory clarity and broadening investor interest has culminated in robust IPO activity. In 2025, nearly 1,300 IPOs raised approximately $172 billion, a 39% increase in proceeds year-over-year, with the US, India, Japan, Hong Kong and Greater China at the forefront. Specifically related to digital asse native firms, IPOs increased significantly from 2024 to 2025. This IPO surge reflects the momentum created as both digital asset native companies and TradFi institutions capitalize on new opportunities in the public markets³.

Laying the groundwork: Strategic priorities for IPO success

Digital asset native players preparing to step onto the public stage will encounter a distinct set of expectations and challenges that must be navigated to achieve successful fundraising. While regulatory clarity, driven by initiatives like SEC Project Crypto, has fostered a more confident environment for both issuers and investors. Digital asset native IPO candidates are now expected to go beyond mere innovation; they must demonstrate robust compliance, clear governance and the ability to translate complex blockchain business models into transparent, auditable financial reporting.

Amidst this rapid evolution, digital asset native companies must also confront the practical realities of IPO readiness. Success in today’s market requires a clear-eyed focus on foundational priorities that underpin sustainable growth and investor confidence.

To navigate these challenges effectively, digital asset native companies should consider leading practices related to 10 areas, each presenting unique challenges and opportunities. Understanding the significance of each domain and how to approach it is crucial for building a foundation of trust, resilience and transparency in public markets. By addressing these strategic priorities, companies can position themselves to thrive in the evolving landscape of public fundraising.

By understanding the unique importance of each of these areas and approaching them with intentionality, digital asset native companies will be positioned to meet the demands of public markets and deliver lasting value.

What every digital asset native company must ask to achieve IPO readiness

For digital asset exchanges, blockchain infrastructure providers and digital asset treasury (DAT) firms, the path to IPO readiness is paved with critical questions that need to be addressed. From determining how to classify customer assets to navigating the complexities of revenue recognition and disclosure requirements, each business model presents its own set of challenges. By asking the right questions and focusing on foundational priorities, digital asset native companies can build a robust framework for IPO success, positioning themselves to thrive before and after IPO in an increasingly competitive landscape.

A. Digital asset exchanges: Enabling liquidity, transparency and trust

For digital asset exchanges, public company reporting brings unique complexities. Key questions include:

• Revenue recognition: How should transaction fees, spreads and staking rewards be recorded — gross vs. net?
• Customer assets and liabilities: Should customer digital assets and fiat be on or off the balance sheet?
• Asset classification and valuation: How should crypto held by the exchange be classified and valued?
• Derivatives, margin and collateral: How should these be recognized and disclosed?
• Borrowing and lending: How should loans, interest and rehypothecation be presented?
• Disclosures: What key judgments, risks and assumptions should be highlighted — including customer asset safeguarding, platform risk, regulatory compliance and concentration of counterparties or digital assets?
• Controls: What reconciliation and IT controls are needed for audit readiness?

B. Blockchain infrastructure: Building for transparency and growth

Blockchain infrastructure providers must address a different set of readiness questions:

• Token issuance and recognition: How should protocol-issued tokens be recognized and measured?
• Revenue recognition: How should revenues from staking, node operation and Application Programming Interfaces (APIs) be recognized?
• Development costs: Which costs must be capitalized vs. expensed?
• Treasury and token holdings: How should reserves be classified and valued?
• Grants and ecosystem funding: How should grants and token distributions be accounted for?
• Related-party analysis: How should related-party transactions be disclosed?
• Disclosures: What risks and assumptions should be highlighted — such as protocol governance, token economics, related-party arrangements and technology dependencies?
• Controls: What processes are needed to validate token balances and rewards?

C. DAT: Managing complexity and risk 

For DAT firms, IPO readiness hinges on:

• Asset classification and valuation: How should digital asset holdings be presented?
• Revenue recognition: How should income from validating activities (e.g., staking) and lending be recognized?
• Hedging and derivatives: How should derivatives be recognized, presented and measured?
• Borrowing and lending: How should loans and rehypothecation be presented?
• Disclosures: What key risks, assumptions and key performance indicators (KPIs) should be highlighted — with a focus on liquidity, valuation methodologies, counterparty exposures and treasury management strategies?
• Controls: What reconciliation and IT General Controls (“ITGCs”) are needed for treasury transactions?

D. From readiness to results: What sets digital asset native IPO leaders apart

Regardless of business model, the most successful digital asset native IPO candidates share several execution leading practices:

• Start early: Begin IPO readiness 12–24 months ahead, building flexible strategies for rapid execution when windows open.
• Focus on quality: Investors are prioritizing profitability, governance and resilience over speculative growth stories.
• Demonstrate innovation: Companies credibly leveraging AI and digital transformation continue to command premium valuations.
• Maintain dual-track readiness: Prepare for both IPO and alternative exits (SPAC, M&A, secondary sales) to maximize flexibility and strategic options.
• Confirm auditor selection and readiness: Proactively confirm your audit firm’s ability to serve pre- and post-IPO, including independence and relevant SEC experience. Early engagement enables alignment on audit requirements and supports a smooth transition to public company reporting.

Capturing opportunity for digital asset companies in a transforming IPO market

With digital asset IPO activity accelerating at an unprecedented pace, companies must be proactive in addressing the unique accounting, disclosure and control challenges of the sector. Establishing robust accounting policies, transparent disclosures and scalable internal controls is essential for IPO readiness and long-term success in the public markets. As the regulatory landscape evolves and investor expectations rise, organizations that invest early in financial discipline and operational excellence will be best positioned to thrive as public companies.

Sean Riley, Senior Manager, Ernst & Young LLP and Taylor Hayes, Senior Manager, Ernst & Young LLP contributed to this article.