Coinbase Announces Plans to List SEC-Regulated Crypto Securities
The biggest cryptocurrency exchange in the U.S. has announced that it is on track to list SEC-regulated crypto securities, pending approval from federal authorities.
Asiff Hirji, president and chief operating officer at San Francisco-based exchange Coinbase, revealed the company’s intentions. If approved, Coinbase will soon be able to offer blockchain-based securities, under the oversight of the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). According to Hirji, this move is made possible by the exchange’s acquisition of a broker-dealer license, an alternative trading system license (ATS), and a registered investment adviser license (RIA).
Following on from Coinbase’s suite of institutional products announcement last month, the exchange is of the opinion that this is an important step in the crypto ecosystem. It also signals that the crypto economy has reached another level of maturation. The exchange is also in the process of rebranding its GDAX platform to Coinbase Pro and is acquiring Paradex, a token trade relay platform.
“Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets - like 24/7 trading, real-time settlement, and chain-of-title,” said Hirji.
Coinbase's latest announcement comes in the same week that the head of the SEC made it clear that the agency wouldn’t be changing the rules for the cryptocurrency market when it comes to defining what is or isn’t a security.
“We are not going to do any violence to the traditional definition of a security that has worked for a long time”, said Jay Clayton, chair of the SEC to CNBC. “We’ve been doing this a long time, there’s no need to change the definition.”
He went on to say that the agency is not adjusting the rules for initial coin offerings (ICOs) either. He clarified, though, that cryptocurrencies, which are replacements for fiat currencies are a type of currency that are not a security. Whereas, a digital token, or a digital asset, that is used in an ICO is deemed a security by the SEC’s definition.
“As the regulatory landscape clears up we can expect far more investors, including big ticket institutions, to make their first cryptocurrency investments,” said Iqbal Gandham, U.K. managing director at eToro to CoinJournal. “For the first few months of this year, the crypto industry has been jogging along at a relatively slow pace waiting for the opportunity to stretch into sprint, this might just be that moment.”