Coinbase gets green light to offer securities cryptocurrencies

Posted: 17 July 2018 12:34 pm
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Approval for Coinbase's new acquisitions comes with three new licences that let it offer security tokens.

Update 18 July: Bloomberg reports that Coinbase has clarified that it did not technically receive SEC approval for all three purchases, as was initially reported. This is because the SEC wasn't involved in the approvals process for the purchase of Keystone Capital Corp.

Coinbase has received SEC approval to purchase Keystone Capital Corp., Venomate Marketplace Inc. and Digital Wealth LLC.

These acquisitions will provide Coinbase the licences to operate as a broker dealer, an alternative trading system and a registered investment adviser, Coinbase said. With the acquisitions approved, Coinbase will be able to offer security tokens such as ICO coins or tokens which pay dividends, under federal oversight.

Previously Coinbase has operated under a patchwork licensing scheme, consisting largely of state-by-state money transmission licences.

This means you can expect a much wider range of tokens to be listed on Coinbase in the future, beyond those which have already been announced. With many cryptocurrencies operating in a regulatory grey area – neither clearly a security or not – different exchanges have listed different coins. Coinbase has been one of the most cautious platforms, backing away from listing many coins that other platforms do just in case they're classified as securities.

A Coinbase spokesperson said the next step will be to integrate its technology and systems into the new subsidiaries, without giving any clear timeline.

The ICO market has continued booming, with some estimates putting the amount raised at up to $12 billion in 2017, and even more in 2018. The SEC has said that most or all ICOs are securities, which means any platform that offers them needs to comply with federal laws and be appropriately licensed to do so.

These acquisitions and the new licences are another step in a long line of Coinbase expansions, and removing the obstacles in the way of listing more tokens is one of its key priorities.

This stands to see new tokens appear not only on the primary Coinbase platform, but also on its new limbs such as its block trading platform, custody service, market index, Coinbase Pro trading platform, and its newly-approved wealth management and alternative trading systems. However, it's worth noting that not all assets will be available in all countries.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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