In an official announcement earlier today, Coinbase revealed its plans to become the very first crypto broker-dealer, capable of offering blockchain-based securities which are under the purview of the Securities and Exchange Commission (SEC).
Asiff Hirji, acting President and Chief Operations Officer (COO) of Coinbase, announced that the leading US cryptocurrency exchange is on the verge of becoming a broker-dealer capable of offering crypto securities regulated by the SEC.
Today we’re excited to announce that we’re on track to become a US-regulated blockchain securities trading venue. We believe this is an important moment not only for Coinbase, but the entire crypto ecosystem. https://t.co/3grNDa6l9Z
— Coinbase (@coinbase) June 6, 2018
On Verge of Operating a Regulated Broker-Dealer
The announcement, published on the company’s official blog, shares that Coinbase is waiting for an approval by the feds to become a fully-fledged, regulated broker-dealer. This became possible after the exchange managed to pull off the successful “acquisition of a broker-dealer license, an alternative trading system license (ATS), and a registered investment advisor (RIA) license.”
Evidently, Coinbase managed to acquire the following companies:
- Keystone Capital Corp
- Venovate Marketplace, Inc.
- Digital Wealth LLC.
The details of these acquisitions have yet to be disclosed.
What Does This Mean?
Should Coinbase succeed in getting their licenses approved, this would significantly broaden its potential service capabilities, essentially turning it into the first regulated cryptocurrency broker-dealer under the purview of the SEC and FINRA.
As noted in the announcement, this would set the exchange on a path where it can offer crypto securities trading, margin trading, and over-the-counter (OTC) trading, as well as new market data products. Given the fact that there are numerous digital assets on the market, with quite a lot of them fulfilling the lawful definition of a “security”, this could potentially open up the door for serious market expansion.
In the words of Mr. Hirji:
Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement, and chain-of-title.
The announcement follows recent news of Coinbase adding a suite of products for institutional investors. In addition, the San Francisco-based digital currency exchange has also been having conversations regarding banking licenses.
What do you think of Coinbase’s plans? Do you think they stand a chance when it comes to their licenses being approved? Don’t hesitate to share your thoughts in the comments below!
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