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.

Facebook’s Digital Wallet Subsidiary Calibra Rebrands to Novi

Facebook’s digital wallet subsidiary Calibra has rebranded to Novi, a name that was inspired on the Latin words “novus” and “via,” meaning new and way, respectively.

The rebrand came with a new design meant to represent the “fluid movement of digital currencies,” while maintaining the Libra icon on its logo. An announcement the firm published reads:

While we’ve changed our name from Calibra, we haven’t changed our long-term commitment to helping people around the world access affordable financial services.

The announcement details that users will be able to use the Novi wallet as a standalone app to send and receive Libra digital currencies, and that it will also be integrated into Facebook’s Messenger and WhatsApp applications.

Per the announcement the wallet will include “no hidden charges,” and transactions will be instant. To use Novi, customers will have to be verified using government-issued ID, and “fraud protections” will be built-in to prevent illicit uses.

It further added that Novi hopes to launch when the “Libra network is available.” An initial launch will only include a specific set of countries, and the firm will have a customer support team available 24/7 to help out its users.

In a FAQ section on Novi’s website,e the firm seems to imply there will be minimal to no transaction fees, as the answer starts with a “what you send is what they get,” before adding users won’t have to worry about hidden charges. It concludes Novi is “cutting fees to help people keep more of their money.”

On social media Kevin Weil,co-creator of Libra and Novi’s VP of Product explained the rebrand came as it could be confusing for people to have two different organizations, the Libra Association and Facebook’s Libra wallet subsidiary, with such similar names.

Featured image via Unsplash.