Cryptocurrency exchange Coinbase has been given green light by US financial regulators to acquire three companies that will allow it to list cryptocurrencies considered to be securities.
Last month, Coinbase announced that it would acquire financial services firms Keystone Capital, Venovate Marketplace and Digital Wealth, in an effort to expand its offerings while working as an alternative trading system (ATS), a broker-dealer, and a registered investment advisor. At the time, the company said it was waiting on approval from the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) for several forms of licensure.
On Monday, a Coinbase spokesperson confirmed that the SEC and FINRA have officially authorized the company to move forward with the acquisition of the three companies. The SEC oversight will enable Coinbase to list blockchain-based securities, while Keystone’s FINRA license will allow the exchange to operate as an alternative trading system.
The spokesperson said that Coinbase will now integrate its technology into the new subsidiaries, but did not reveal a timeline. The integration process will include making sure employees “have the proper licenses and reviewing how the company reports data and on-board customers.”
The news came after Coinbase announced that it is exploring the addition of five new cryptocurrencies to its trading lists, including Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX). Howver, the company notes that due to the nature of these cryptocurrencies, it cannot guarantee that they will be listed for trading.
In March of this year, the SEC said that a platform that trades securities and operates as an exchange, as defined by the federal securities laws, must register as a national securities exchange. It added that companies aiming to operate as an alternative trading system are also subject to regulatory requirements, including registering with the SEC as a broker-dealer and becoming a member of a self-regulatory organization (SRO).
“Registration as a broker-dealer subjects the ATS to a host of regulatory requirements, such as the requirement to have reasonable policies and procedures to prevent the misuse of material non-public information, books and records requirements, and financial responsibility rules, including, as applicable, requirements concerning the safeguarding and custody of customer funds and securities,” the SEC said.
Source : ICOnow