With its internal probe into suspected insider trading ahead of its listing of bitcoin cash still ongoing, Coinbase, one of the most popular cryptocurrency marketplaces in the US, has gotten the green light to move forward with a trio of acquisitions that will give the company the licenses it needs to list and trade federally-regulated securities, something that's expected to significantly broaden the number of cryptocurrencies that will be available on the platform, according to Bloomberg.
The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority approved Coinbase’s purchase of Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC, a company spokesman said Monday. The acquisitions enable the firm to offer so-called security tokens, and also place the businesses under federal oversight. Coinbase has primarily been regulated by a patchwork of state authorities.
The move provides Coinbase licenses to operate as a broker dealer, an alternative trading system and a registered investment adviser, the San Francisco-based company said in June. Alternative trading systems operate outside traditional public stock exchanges.
With these newfound licenses, Coinbase could soon begin listing hundreds of ICO tokens and other cryptocurrencies. Right now, Coinbase customers can only buy bitcoin, bitcoin cash, ethereum and litecoin. Coinbase said Friday that it’s looking into letting users trade five new digital currencies, Cardano, Basic Attention Token, Stellar, Zcash and Ox, but couldn't say for certain that it would list them. The company said it's possible some coins might only be available in certain regions.
It's reportedly still working on adding ethereum classic, which was excluded from being beholden to securities laws last year.
As Bloomberg points out, regulated trading platforms could eventually host hundreds, possibly thousands, of ICOs. Despite a crackdown by the US, China and other countries, ICOs have already raised more than $12 billion in 2018, more than triple what they did during all of 2017. The SEC has said most of the coins are securities, which means issuers must register and comply with federal securities laws, as must exchanges that list the tokens.
The federal government has every reason to support Coinbase's expansion. The company has a reputation with regulators, and it has already willingly handed over information on its customers to the IRS, which suggests it might also be willing to cooperate in the future.
Though regulators will no doubt be watching closely after the rollout of bitcoin cash trading on Coinbase appeared to provoke what looked like insider trading in the bitcoin cash market.