Coinbase is Officially a Regulated Securities Broker-Dealer

The SEC and FINRA have approved Coinbase's acquisition of Keystone Capital, making the company an official broker-dealer.


Coinbase is now operational as a fully regulated broker-dealer. It comes barely a month after the leading cryptocurrency exchange announced that it was on track to becoming licensed by the federal authorities.

According to the original press release, the U.S. SEC and the Financial Industry Regulatory Authority (FINRA) approved the acquisition of Keystone Capital, Venovate Marketplace, and Digital Wealth LLC. Now that the purchase of the three companies was successful, Coinbase is officially a securities broker-dealer.

As a broker-dealer, Coinbase can offer coins and tokens that it was previously not allowed to offer. This is a major step for the industry and can see many interesting projects come to life. The company just announced that it was exploring the addition of five new coins.

It’s been a busy few days for Coinbase and the quick succession of positive news has had its influence on the crypto markets. The latest news, however, has seen Bitcoin (BTC) benefit from the upturn in sentiment to surge past $6,700 on Monday evening and has since exploded above $7,300.

What this means for Coinbase

The platform had sought approval from U.S. regulators in its efforts to acquire the trio of companies seen as the final step in its bid to become the first fully regulated site allowed to list, sell or facilitate the trading of coins and tokens that are considered as securities under the law.

The approval of the acquisitions also means that Coinbase now has the license to not only operate as a regulated broker-dealer but also as an alternative trading system (ATS) and a registered investment adviser (RIA). An ATS has the license to offer services not offered by the traditional stock exchanges.

Asiff Hirji, Coinbase president and COO referred to the purchase of the companies a path forward for the exchange, saying that:

“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.”

Coinbase on the move

Coinbase currently allows its customers to trade only four digital assets: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Plans are underway to have Ethereum Classic added, as previously confirmed.

However, on July 13, Coinbase announced that it was exploring the possibility of having its customers get access to five new coins. The company said that it would give more updates about its plans to list Cardano (ADA), Basic Attention Token (BAT), Stellar (XLM), Zcash (ZEC), and Ox (ZRX).

The platform, however, stated that it could potentially list the digital coins with partial support, like trading only or in other cases, make them available in certain countries/states only.

Even though the platform expressly said that there were no guarantees of all the coins being listed, the latest announcement made this Monday ties in well with a possibility that more coins will be listed soon.

What could be clear though is that adding new coins and tokens to the trading platform could be the next big move for Coinbase. It allows it to leverage its popularity in the US as a user-friendly site.

Efforts to set itself aside as a top cryptocurrency company has also seen the San Francisco-based platform launch a crypto fund and an institutional custody solution.

The Coinbase Index Fund was open to those investors who wanted to invest somewhere from $250,000 to $20M. At the moment, the fund is only available to accredited investors who are US residents. 

Major steps for the industry

The SEC’s and FINRA’s approval of Coinbase as a fully regulated securities broker-dealer constitutes a great step forward for the cryptocurrency indsutry. It’s opening up avenues that could lead to several new tokens being listed on the exchange, a precursor to wide acceptability and use.

More importantly, this could apply pressure on traditional banks to offer such financial services and products sooner rather than later.

For example, Goldman Sachs-backed Circle, a competitor to Coinbase, has previously indicated it is looking into a similar strategy. The platform said that it had the intention to get the necessary SEC approval to become a regulated brokerage and trading provider.

Leave A Reply

Your email address will not be published.