Coinbase has announced that it is moving forward with a plan to acquire licensure that would allow the company to begin offering blockchain-based securities and participate in the ICO market. The company has also acquired the broker-dealer Keystone Capital Corp., based in California.
Keystone is registered with the Financial Industry Regulatory Authority (FINRA), is a registered investment advisor, and has licensure to operate as an ATS (alternative trading system). The acquisition of Keystone could provide a pathway for Coinbase to offer stocks or other securities in the future; the terms of the acquisition remain undisclosed.
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Coinbase will not be able to legally operate through Keystone until the company acquires the appropriate licensure.
Today we’re excited to announce that we’re on track to become a US-regulated blockchain securities trading venue. We believe this is an important moment not only for Coinbase, but the entire crypto ecosystem. https://t.co/3grNDa6l9Z
— Coinbase (@coinbase) June 6, 2018
Details of Coinbase’s licensure application process were laid out in a blog post entitled “Our path to listing SEC-regulated crypto securities,” Coinbase explained that it’s currently waiting on approval from the US Securities and Exchange Commission (SEC) and FINRA for several forms of licensure: a broker-dealer license, and alternative trading system license, and a registered investment advisor license.
The acquisition of these licenses along with the acquisition of Keystone could open up opportunities for Coinbase to deepen relationships with corporations and institutional businesses.
“Securing these licenses will bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell, and use many different types of crypto assets,” the blog post said. Coinbase is confident that it will have no trouble acquiring the licenses: “we see this is as an important step toward a more open financial system for the world.”
The US’s Lack of Regulatory Clarity Has Put the Industry on Edge
Coinbase has remained one of the most compliant crypto firms in the world despite a serious lack of regulatory clarity in the United States. While it seems that the SEC legally considers nearly every ICO token as a security, no official statements or laws have been issued declaring all ICO tokens as securities; many of them describe themselves as utilities.
Additionally, several other government bodies made contradictory statements about the legal classification of ICO tokens earlier this year.
What a nightmare this is. SEC says “all ICOs” its seen are sales of securities, but FinCEN says they are “generally” money transmission.
But by law, they can’t be both.
As an industry, we must do a better job of educating our governments.https://t.co/KUaX6uoehs … @coincenter
— Marco Santori (@msantoriESQ) March 6, 2018
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