Uphold crypto platform acquires New York brokerage

June 28, 2018
Chris Wheal

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.

Courtesy of Uphold website

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.”

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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