Coinbase seeks brokerage licence from SEC

Posted: 9 April 2018 5:08 pm

A brokerage licence would let Coinbase start offering a wider range of cryptocurrencies.

Coinbase is in talks with the SEC to pursue a brokerage licence, reports the Wall Street Journal. A licence would see it start offering a much wider range of digital currencies.

"As soon as there is more regulatory clarity than there currently is, you would expect us to start listing more assets," said Coinbase president Asiff Hirji, noting that Coinbase only wants to list coins that have "some amount of regulatory clarity."

A broker registration would also see Coinbase giving the SEC the power to examine its trade records, cybersecurity and policies, in order to prevent market manipulation and insider trading.

"It’s an early phase where the industry leaders understand they have to live within a highly regulated environment," said Richard Levin, a partner at law firm Polsinelli PC, to the Wall Street Journal. "They have to deal with the SEC."

Coinbase isn't the first cryptocurrency exchange to make overtures to the SEC, but it might be the second.

Poloniex, under new ownership of Circle, was reported to be the first US cryptocurrency exchange to actively court the SEC for registration and regulatory involvement.

Coinbase hasn't hidden its frustration with the current regulatory morass in the US, with Coinbase chief legal officer Mike Lempres gently criticising the lack of communication between different regulatory bodies.

"Congress should insist that the SEC and CFTC coordinate, as they have in the past, to clarify how companies, markets and investors can determine whether an individual token is a security or a commodity," he said in remarks to a House of Representatives hearing on cryptocurrencies. "The current regulatory environment – in particular regulation by enforcement without enough clear guidance on what is permissible – is harming healthy innovation."

This clarity might come from an SEC brokerage licence.

According to the Wall Street Journal, a brokerage licence is viewed as a less cumbersome alternative to a full exchange licence, and it would still allow Coinbase to list approved digital currencies, without the full burden of regulation as a full-fledged exchange.

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

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