Crypto Exchange Coinbase in Talks to Become SEC-Licensed Brokerage

  • Coinbase in talks with SEC to become a licensed brokerage firm
  • Valued at $1.6 billion, Coinbase seemingly has ambitions of becoming the 'Google of Cryptocurrencies'

Coinbase has reportedly approached the US Securities and Exchange Commission (SEC) and other US regulators in order to obtain registration as a brokerage firm. While the company has declined to comment at this time, being a broker is set to offer Coinbase a commanding position.

Currently valued at $1.6 billion, Coinbase is a giant in the cryptocurrency world. With its success, it's looking for new realms to expand into, with the recent controversies surrounding initial coin offerings (ICOs) being one of the areas.

The SEC has been acting against illicit activities of exchanges and ICOs operating within the country. It Is actively protecting investors by monitoring not so honest ICO operators.

Coinbase - Greater Security in Securities

The company is seemingly gearing up to become a Google-like titan when it comes to cryptocurrencies, with its establishment as a brokerage firm being a strong step in the right direction. While the talks have begun, the SEC's uncertainty over digital tokens means that they aren't entirely validated as securities.

The legislation that assesses companies, however, provides pause for concern for any crypto-based company. The Howey Test, set up in 1946, places stringent guidelines on companies to validate them as brokers

  • It is an investment of money
  • There is an expectation of profits from the investment
  • The investment of money is in a common enterprise
  • Any profit comes from the efforts of a promoter or third party

Coinbase provides its own form of vetting for coins made tradeable on its platform. meaning that only cryptos that have demonstrated a longer-term level of stability are listed. As a result, the likes of Bitcoin, Ethereum, Litecoin and Bitcoin Cash are the only listed. As stability improves for altcoins, Coinbase will undoubtedly expand into offering new tokens.

SEC Chairman Jay Clayton has in the past revealed that “most tokens” issued in ICOs are considered securities, which means they can only be legally traded on a licensed exchange. Being licensed would put Coinbase one step ahead of other cryptocurrency exchanges and wallet providers.

Coinbase is also seeking to drive forward innovation, as it considers creating funding for new startups within the field. Recently, the company announced it will allow its users to withdraw funds from bitcoin forks.

Crypto Mining Hardware Manufacturer Canaan Downgrades IPO Target to $100 Million

Michael LaVere
  • Crypto mining manufacturer Canaan Creative has downgraded its IPO target price to $100 million.
  • The previous initial public offering filing had a target price of $400 million. 

Crypto mining machine manufacturer Canaan Creative has updated the terms of its initial public offering (IPO) filing to list shares on a U.S. stock exchange, which includes downgrading its target raise to $100 million. 

According to the updated filing with the U.S. Securities and Exchange Commission (SEC), Canaan has downgraded its IPO from an original target of $400 million to $100 million. The IPO was first announced at the end of October, with Canaan looking to succeed in the launch of a public offering where it’s crypto mining rig competitor Bitmain had previously failed. 

The new filing states that Canaan is aiming to offer 10 million American depositary shares at a price of between $9 and $11 per share. The updated IPO price also pegs Canaan’s diluted market value at around $1.5 billion. Last week it was reported that Canaan had generated a Q3 profit of $13 million, compared to a total net profit of $8.3 million for all of 2018.

Assuming the IPO is a success, Canaan would become the first major bitcoin mining rig manufacturer to go public in the traditional stock market. 

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