Coinbase Backtracks on Claims of SEC Security Approval
Originally published on: BTCMANAGER
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July 19, 2018
On July 16, 2018, Coinbase, one of the largest cryptocurrency platforms in the United States, claimed to have received the regulatory nod to acquire three securities companies. However, Coinbase released another statement later, clarifying that it did not receive explicit permission from the SEC or any other government body.
In June 2018, a Coinbase blog post confirmed that the company was actively looking into purchasing Keystone Capital Corp., Venovate Marketplace Inc., and Digital Wealth LLC. The acquisitions will result in Coinbase obtaining licenses to obtain as a broker-dealer, an alternative trading system, and a registered investment adviser.
Regulatory Approval or Lack Thereof
While Coinbase had already announced its intention to purchase these companies a month ago, in June 2018, news of regulatory approval would have represented a significant step forward in that plan. Ultimately, the acquisitions will allow Coinbase to offer a more diverse set of cryptocurrency tokens, including those classified as securities. Since then, the company has also revealed that it is in discussion with other regulators and that it will likely be a while before the platform expands its offerings.
Coinbase spokesperson Elliott Suthers was quoted in a statement as saying, “Being approved to take ownership of these licensed entities is one more step toward our ultimate goal of allowing our customers to trade securities tokens on our platform. There are many more steps and conversations needed with regulators before this journey’s complete.”
However, in a follow-up statement, spokeswoman Rachael Horwitz said:
“It is not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because SEC was not involved in the approval process.”
An SEC spokesperson also confirmed that the commission had not endorsed the acquisitions.
Adding New Crypto Assets
While some international cryptocurrency exchanges support a wide variety of tokens, Coinbase has always been somewhat cautious in its approach. Given that the most of the company’s users come from America, it is imperative for Coinbase to comply with the myriad of state and federal legislation.
In 2018, general manager Dan Romero said in an interview, “If the regulatory environment gets clearer, I think you will see Coinbase adding many new assets to our platform.”
Nevertheless, this news comes only days after the cryptocurrency exchange announced that it was mulling the addition of five new digital tokens to its trading platform. The list of assets under consideration include Cardano, Basic Attention Token, Stellar Lumens, Zcash and 0x. However, Coinbase stopped short of guaranteeing the future availability of these tokens on its platform.
Addressing the legal ramifications of such a move, the company also clarified that “some of these assets may be offered in other jurisdictions before being listed in the US.”
At this time, Coinbase offers a rather small list of cryptocurrencies on its trading platform. Apart from the currently supported Bitcoin, Ethereum, Litecoin and Bitcoin Cash currencies, the company has only confirmed that Ethereum Classic will be added shortly.