Coinbase becomes fully-registered securities dealer

July 17, 2018
Chris Wheal

San Francisco-based cryptocurrency exchange Coinbase has received regulatory approval to list digital coins that are considered to be securities.

 

Coinbase to offer fully licenced securities service

Coinbase sought and received approval from the Securities and Exchange Commission (SEC) which has repeatedly said that digital coins such as bitcoin and ethereum are not securities.

Securities trading approved

Those, however, that come into existence through funding programmes known as initial coin offerings (ICOs) are regarded as securities and the SEC’s approval means Coinbase can legally trade such cryptocurrencies on its platform.

The SEC and the Financial Industry Regulatory Authority (FINRA) this week officially authorized Coinbase’s acquisition of licenced security dealers Keystone Capital, Venovate and Digital Wealth, allowing the exchange to extend its offerings into securities.

Indeed, the company announced on Friday that it was considering adding support for five new tokens: Cardano, Stellar lumens, Basic Attention Token, Zcash, and 0x.

Broker dealer

Authorization of the acquisitions means Coinbase can now act as a fully-licenced broker-dealer, offering all securities – including ICO tokens – and handle billions of dollars worth of investments providing it can gain the support of institutional investors.

Other exchanges are similarly seeking paths to legitimacy. Uphold, the cloud-based digital currency platform announced last month its plans to acquire JNK Securities, a New York broker-dealer.

Circle Internet Financial, meanwhile, announced it was looking to work with brokerages under the oversight of the SEC, with the ultimate aim of winning a full banking licence.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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