Uphold crypto platform acquires New York brokerage
Uphold, the cloud-based digital money platform, announced late on Wednesday it had reached an agreement to acquire JNK Securities, a New York broker-dealer.
Announcing the move on its blogsite, Uphold said it had filed an application with the Financial Regulatory Authority (FINRA) for the approval of the change of ownership and business expansion.
“If the application is approved, the extension of the broker-dealer registration will encompass Uphold’s securities and security-token business and expand our compliance footprint, customer base, and service offering,” said Adrian Steckel, chief executive, in the blog post.
Crypto regulatory legitimacy
The move echoes those of a growing number of cryptocurrency operators looking to bring greater legitimacy to their businesses in the current environment of regulatory uncertainty.
Indeed, the Securities and Exchange Commission (SEC) – while noting coins such as bitcoin and ethereum are not securities – initial coin offerings (ICOs) are, and must be registered.
Becoming a registered broker-dealer, therefore, brings all of the company’s operations under the regulatory scrutiny of the SEC – whether it wants them or not.
Coinbase and Circle moves
Coinbase announced in early June that it had acquired securities broker Keystone Capital, saying: “We believe this is an important moment not only for Coinbase, but the entire crypto ecosystem.”
Meanwhile, Circle Internet Financial, a crypto-asset platform, also announced in early June that it was looking to work with brokerages under the oversight of the SEC, with an eventual goal of acquiring a full banking licence.
Trust and transparency
Uphold’s Steckel added: “We have kept a close eye on statements from global regulators regarding virtual currencies and tokens and believe that many crypto assets (particularly ICO tokens) may be treated as securities in some cases.
“Broker-dealer and ATS coverage is key to protecting our customers and to building a pre-eminent financial services ecosystem.
“We are proud to be a compliant financial services company, working with regulators to ensure we provide the most trusted and transparent access to digital financial services worldwide.”