Coinbase ‘On Track’ to Receive SEC Registration, List Blockchain Securities

The Coinbase cryptocurrency exchange app is seen on an iPhone screen. Coinbase just poached dealmaker Emilie Choi from LinkedIn

The Coinbase cryptocurrency exchange app is seen on an iPhone screen. Coinbase just poached dealmaker Emilie Choi from LinkedIn

"That represents a huge opportunity for a company like Coinbase, particularly as more startups submit to regulatory oversight and, as a result, produce what are called "security" tokens".

Moreover, the agency has said that almost every initial coin offering (ICO) token that it has encountered is a security under federal guidelines.

The move comes after Division Director William Hinman announced before the US House of Representatives Subcommittee on Capital Markets, Securities, and Investment in April that there are merits to ICOs that allow "for a different type of enterprise, one that's more decentralized" and that the SEC is interested in making sure regulations don't stifle cryptocurrency and blockchain innovation.

The exchange has traded more than a $150 billion in assets for more than 20 million customers and is now valued at about $8 billion was recently listed at number 10 on CNBC's top 50 disrupter list.

Two titans of US cryptocurrency trading are in a race to build the nation's first regulated venues for tokens deemed to be securities, potentially appeasing watchdogs threatening to rein in the multibillion-dollar market.

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"If approved, these licenses will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products".

In addition, Coinbase has acquired three companies - Keystone Capital Corp., Venovate Marketplace, Inc. and Digital Wealth LLC - in a strategic effort to secure an alternative trading system (ATS) license and a registered investment advisor (RIA) license. The acquisition of Keystone could provide a pathway for Coinbase to offer stocks or other securities in the future; the terms of the acquisition remain undisclosed.

Should Coinbase succeed in getting their licenses approved, this would significantly broaden its potential service capabilities, essentially turning it into the first regulated cryptocurrency broker-dealer under the purview of the SEC and FINRA.

He also said that Coinbase could tokenise the existing securities products apart from offering its own securitised token which could bring the benefits of Cryptocurrency-based markets to the regular securities markets.

Coinbase, which has so far raised $225 million from investors, isn't alone in its interest and along with sizable contenders overseas, it's facing growing competition in the U.S. As a broker-dealer, Coinbase will officially be regulated by the SEC as well as FINRA.

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