SEC Greenlights Coinbase Acquisitions, Enabling It to List Security Tokens
Coinbase has reportedly received approval from the US Securities and Exchange Commission (SEC) to acquire Digital Wealth LLC, Venovate Marketplace Inc. and Keystone Capital Corp, acquisitions which will enable Coinbase to list tokens considered to be securities.
Citing an unnamed company spokesman, a July 16 Bloomberg article reported that the SEC and the US Financial Industry Regulatory Authority (FINFRA) have approved the acquisitions. Coinbase is set to enjoy upgraded status when the acquisitions go through.
Venovate and Keystone are both registered with regulators as broker-dealers, while Venovate is also licensed as an alternative trading system. Digital Wealth boasts an investment adviser license registered with the SEC. The acquisitions would enable Coinbase to acquire these federal licenses, enabling the company to offer a host of new services to their clients, including the ability to list tokens deemed securities in the eyes of the law on their exchange.
In June, SEC Chairman Jay Clayton reaffirmed his previously stated position that he considers “most” initial coin offering (ICO) projects to be securities. Although another SEC executive did publicly say that Bitcoin and Ethereum will not be considered securities, cryptocurrency exchanges operating in the US would not be able to permit trade in most tokens without a license, depriving them of a huge chunk of revenue.
Coinbase announced these acquisitions in early June, with COO and President Asiff Hirji revealing that Coinbase intends to offer services that include “crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products.”
Reports of the successful acquisitions come after an announcement made by Coinbase in a July 13 blog post that the company is “exploring” enabling trade on their platform in five new digital coins: Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX). However, Coinbase noted that they “cannot guarantee they [the tokens] will be listed.”
Due to different legal approaches to cryptocurrency around the world, some of these assets “may be offered in other jurisdictions prior to being listed in the US,” “while others may only be supported in specific jurisdictions.”