Coinbase will be allowed to list and trade securities, according to a report from Bloomberg Crypto.
The popular US exchange announced on Monday, July 16th that it has received all the paperwork and all the legal licenses required to complete the purchase of three corporate entities, Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC. These entities were actually purchased last month and their official registration with the SEC will make the company suitable for trading public stock exchange listings, as well as federally regulated digital coins that are found by the SEC to be securities. This will be a serious upgrade for Coinbase, as it was previously subjected to state law which had no jurisdiction over securities trading. With this move, Coinbase receives required licenses to perform broker-dealer services, alternative trading system services and to provide registered investment advising of its customers.
A Coinbase spokesperson has told Bloomberg that the next step for the company will be “integrating its technology into the new subsidiaries”. This means that Coinbase will require its new employees to possess the proper licenses and will also require the new entities to adjust the ways they deal with data reports and on-board customers. Coinbase hasn’t yet released a timeline of how long this process will take.
The implications of this move could be massive for crypto. We all recall the all-round ban that USA, China, Korea and other countries placed on various elements of crypto, with special attention being given to ICO’s. SEC has explained multiple times that most ICO coins are securities, and as such will be required to register and comply with federal laws. As a result, most ICO issuing companies avoided to do so in the past, finding various ways to make sure that their coin isn’t a security. After all, no top crypto exchange had the license to trade securities, up until now. Coinbase isn’t the only exchange that was seeking these licenses, as multiple platforms, including Circle Internet Financial Ltd, one of the world’s most valuable cryptocurrency platforms, are currently looking to register as brokerage and trading venues with the SEC.
Coinbase receiving these licenses is important, as it ensures that those coins which are deemed as securities will have a market to be traded on. While the exchange announced that it will be adding several new coins, it also pointed out that it isn’t 100% certain that these coins aren’t securities. This latest upgrade will ensure that there will be liquidity around each security that gets registered on the exchange, meaning that getting listed as a security won’t be a death sentence for a cryptocurrency anymore. Now all such coin needs to do is get listed on Coinbase. Easy peasy, right?
