Digital Identity Startup Distributed Systems Acquired By Coinbase
Cryptocurrency exchange Coinbase has completed the acquisition of Distributed Systems, a San Francisco-based digital identity startup.
Cryptocurrency exchange Coinbase has completed the acquisition of Distributed Systems, a San Francisco-based digital identity startup. This announcement was made by Coinbase yesterday, August 15.
The digital identity startup has been working on decentralized identity solutions, according to Coinbase Identity project manager B Byrne in his blog post.
Distributed Systems is made up of five people, who will now join a unit within Coinbase that has been set up to develop digital identity solutions
Byrne commented that Blockchain has the potential to help people maintain complete control over their digital identities, thus ensuring that their personal information remains safe.
He further wrote that the safety could extend to social security numbers for Americans by adding protections for users, as an example
According to Byrne:
Every time you want to prove who you are with your SSN, you need to give away a copy of it. That copy has exactly the same power as the original, so when there’s a data breach with copies of your data it puts your identity at risk. A decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity.
He further added:
If you stretch your imagination a little further, you can imagine this applying to your photos, social media posts and maybe one day your passport too.
Despite that, Coinbase isn’t in a rush to implement digital identity tools. In his post, Byrne added that the exchange will be careful about how and where it will apply this technology.
He also said that Coinbase will need to consider issues around anonymity, privacy and the immutability of a blockchain as it continues to explore the technology.
Coinbase officially a broker-dealer
Last month, Coinbase announced that U.S. SEC and the Financial Industry Regulatory Authority (FINFRA) have approved its purchase of three companies. These companies will help Coinbase offer security tokens in the future under federal oversight.
The companies that were approved for acquisitions include Digital Wealth LLC, Venovate Marketplace Inc., and Keystone Capital Corp.
Venovate and Keystone have already been registered with the SEC and FINRA as broker-dealers. Digital Wealth, on the other hand, has an SEC-registered investment adviser license, with Venovate having the license as an alternative trading system.
These acquisitions alongside others made over the past few years are strategically positioning Coinbase to become one of the most powerful cryptocurrency companies in the world.
The company continues to make positive moves despite the bear market causing a decline in prices.