Coinbase Attempting to Become SEC-Regulated Broker Dealer
Coinbase has been on the news lately for a lot of positive things and this time, they are making strides towards becoming a fully regulated broker dealer, approved by the US Securities and Exchange Commission (SEC). According to an announcement on their official blog, Coinbase revealed that they have acquired securities dealer Keystone Capital Corp. This is an addition to Digital Wealth LLC and Venovate Marketplace, Inc. that they had already acquired.
There’s no arguing the fact that regulators have been coming hard on players in the cryptocurrency space, and many exchanges have been forced to shut down due to issues bothering on “Know Your Customer (KYC)” and “Anti-Money Laundering (AML)” laws.
This recent acquisition by Coinbase, a San Francisco-based exchange could see their product offering extend to new frontiers and even non-crypto financial products. The company is positive about this recent development and noted that they are looking forward to “work with regulators to tokenize existing types of securities, …[and] democratize access to capital markets.” Asiff Hirji who is the President and Chief Operating Officer of Coinbase, said:
“If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This step forward is being made possible by our acquisition of a broker-dealer license.”
Coinbase has recorded remarkable strides, and this in my opinion is what blockchain tech is all about – solutions, progress and adoption. The crypto exchange has claimed to trade over $150 billion in assets and effectively manage the accounts of over 20 million users. It is no surprise why they are working towards being listed as SEC-regulated crypto securities.
This move sets the exchange in the same playing field with other platforms looking to trade blockchain-based securities in compliance with regulatory bodies like the SEC. Susquehanna, a Pennsylvania-based firm, recently amended their broker dealer license to cover cryptocurrencies and Bitcoin futures. They are currently targeting a small group of clients and are hoping to expand their product offering in the coming years.
Circle Internet Financial Ltd., a peer-to-peer payments platform is also on the list, seeking a banking license and registration as a brokerage and trading venue with the SEC. If this is approved, the platform can now sell tokens that may be considered as securities. The COO, Robert Bench, noted that a banking license would streamline the number of regulators they would have to deal with, “You’re able to have a single conversation. It’s hard to have 50 conversations.”
It is interesting to see a lot of organizations open their arms towards blockchain solutions. One of the major obstacles towards mainstream adoption of cryptocurrency and blockchain in general is the fact that the market is loosely regulated. By operating within the confines of regulations, investors will have more confidence in the crypto space.