Coinbase Acquires Security Company in Move to Become SEC-Regulated Broker-Dealer

Coinbase, the leading crypto trading platform in the U.S., is currently making moves to position itself as a fully regulated broker-dealer by the U.S. Securities and Exchange Commission (SEC). If successful, the San Franciso-based company will join the ranks of other platforms involved in trading blockchain-based securities completely approved by the SEC.

Coinbase was able to make this move because of its acquisition of securities dealer Keystone Capital Corp, Digital Wealth LLC, and Venovate Marketplace Inc. Moreover, the company will also be in the position to expand from cryptocurrency trading to financial assets outside the crypto market Cointelegraph reported.

The details of the acquisition between Coinbase and Keystone Capital are still unknown, but the reason behind it is clear enough. The crypto trading platform wants to operate under the Keystone license as the newly acquired corporation is able to act as a registered investment and conduct an alternative trading structure.

But first, the company requires a regulatory confirmation to operate under that license. Moreover, president and chief operating officer Asiff Hirji admitted that even after getting the approval, it would still take months before they can fully adopt Keystone into their system.

Coinbase means to tap into the billions of funds that startups manage to accumulate each year through initial coin offerings (ICO). In the first quarter of 2018 alone, ICOs gathered $6.3 billion. This is a huge market that the crypto exchange platform can operate in as startups usually run into regulatory restrictions, which then forces them to create “security” tokens.

"If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA),” Hirji said. “This step forward is being made possible by our acquisition of a broker-dealer license."

Coinbase is also planning to expand its venture within Japan’s borders. However, there is a lot of competition in the country, with 16 registered crypto exchanges already in operation.