In a move that will permit it to list cryptoassets which the agency considers as blockchain securities, cryptocurrency industry giant Coinbase revealed on Wednesday that it is “on track” to acquire SEC registration as a broker-dealer.
In an official statement released by Coinbase President and COO Asiff Hirji, the company confirmed that it has received a broker-dealer license, an alternative trading system (ATS), and a registered investment advisor (RIA) license and waiting for approval will commence running as a broker-dealer under the supervision of the SEC and Financial Industry Regulatory Authority (FINRA).
Jay Clayton, SEC Chairman noted that cryptocurrencies developed to replace sovereign fiat currency such as bitcoin are not liable to securities laws, however, there have been arguments as to whether other cryptocurrencies like those initially distributed through crowd sales, should be considered differently. Furthermore, the agency stated almost every initial coin offering (ICO) token that it has come across is a security under federal jurisdictions.
Hirji has previously noted that the four assets listed on the Coinbase platform- bitcoin, ether, bitcoin cash and litecoin- were the only ones the company feels at ease to promote, given the regulatory status in the US. Dealing as a broker-dealer would immensely add to the list of assets that the company could register.
“There are now many types of blockchain-based digital assets, from cryptocurrencies to security tokens to collectibles. In the United States, some of these assets will be subject to SEC oversight. With this in mind, securing these licenses will bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell, and use many different types of crypto assets.”
In an effort to secure these licenses, Coinbase received three companies holding various federal licenses: Keystone Capital Corp., Venovate Marketplace, Inc., and Digital Wealth LLC. Keystone and Venovate are each registered with the SEC and FINRA as broker-dealers, while Digital Wealth has an RIA license from the SEC. Venovate also has a license to operate as an ATS.
Coinbase is not the only leading cryptocurrency company trying to receive federal registration in an effort to gain more regulatory compliance.