Coinbase Acquisitions Approved By SEC, FINRA, Paving Way for Security Token Listings

Coinbase Acquisitions Approved By SEC, FINRA, Paving Way for Security Token Listings

Omar Faridi
  • Cryptocurrency exchange Coinbase has been approved to acquire several securities firms – opening up the possibility of crypto securities trading
  • Coinbase has “unprecedented” interest from institutional clients, says company VP Adam White

Cryptocurrency exchange Coinbase has reportedly been granted approval by the US Securities and Exchange Commission (SEC) to acquire several securities firms, opening up the possibility of the platform listing crypto tokens that are classified as securities.

In recent months, the San Francisco based exchange has been looking to further expand its operations in order to capture a wider segment of the evolving cryptocurrency market. In early June, Coinbase acquired Keystone Capital, a Financial Industry Regulatory Authority (FINRA) registered brokerage firm dealing in digital securities.

Soon after the acquisition, the exchange noted that it had to obtain permission from regulatory authorities in order to offer Keystone’s services through its platform. On July 17th, Bloomberg revealed that the SEC and FINRA had approved Coinbase’s business agreements with not only Keystone Capital, but also its acquisitions of Digital Wealth LLC. and Venovate Marketplace, Inc.

This means that the crypto exchange might soon be able to list tokenized securities on its trading platform, in addition to offering trading options for Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

Coinbase Now A Broker, Investment Advisor

Moreover, Coinbase recently announced that it’s considering adding support for several other digital currencies such as Basic Attention Token (BAT), Cardano (ADA), Stellar Lumens (XLM), Zcash (ZEC), and Ox (ZRX). The exchange also said in its blog post that listing these digital assets on its trading platform does not imply that they’re not securities. Depending on the jurisdiction, a crypto token may or may not be classified as a security, Coinbase said.

These developments are quite significant for the exchange because it can now operate as a licensed investment advisor and a broker dealer.

Commenting on the company’s recent acquisitions and plans to list more cryptocurrencies on its exchange, Coinbase vice president Adam White said:

“We have a long-term vision for the space. And we are focused on building the exchange, the wallet, the custodian, that allows capital to move into the space.”

“Unprecedented” Interest From Institutional Investors

Notably, White also mentioned that Coinbase had “unprecedented” interest from institutional clients during 2017 and early 2018, when the market capitalization of all cryptocurrencies briefly surpassed $800 billion. White went on to say that “institutional conversations have become more and more profound” while adding that it’s partly the reason why the exchange company set up a new office in New York and Portland, Oregon.

Institutional investors will gradually enter the crypto market, according to the Coinbase vice president, but “they want absolutely the right regulatory structure around” digital currencies.

White explains that “people are valuing [cryptocurrencies] very differently” and that “the core metrics” investors examine are the number of “daily transactions”, trading volume, and how many traders are actively participating in the market.