Coinbase Forced To Retract Announcement Alluding To Potential Security Tokens Listing
Coinbase has retracted an initial announcement that indicated regulatory approval for the acquisition of three crucial companies would have paved the way, for it to start offering security tokens under federal laws. Early in the week, the cryptocurrency exchange had reported that it had received a green light from the Securities and Exchange Commission to acquire Keystone Corp Digital Wealth LLC and Venovate Marketplace Inc.
The three companies are holders of permits that allow them to operate as broker-dealers as well as alternative trading systems. In a rejoinder, the crypto exchange says Financial Industrial Regulator Authority approved the acquisitions, but the SEC did not have a hand in the matter.
The retraction is of great importance given that the SEC is the only body mandated with the responsibility of regulating assets that are traded in the country. The claim had initially triggered talk that the acquisition marked the first step, towards the listing of blockchain-based securities in the U.S
“It is not correct to say that the SEC and FINRA approved Coin base’s purchase of Keystone because SEC was not involved in the approval process. The SEC’s approval is not required for the change of control application,” Coinbase spokeswoman Rachael Horwitz in a statement.
Despite the correction, Coinbase head of corporate communication says the acquisition had placed the firm on the right trajectory towards obtaining the necessary permits required to operate as a broker-dealer. However, the company still has a long way to go before it can get the much-needed licenses to operate under federal oversight as well as rights to list security tokens.
Coinbase remains regulated under state authorities. Climbing the ladder to be regulated by Federal laws is the ultimate goal as this would allow the company to offer services across the U.S as well as offer a number of securities that as it stands is not possible.
The company is also seeking approval to offer customers the ability to trade security tokens on its platform. Coinbase is also pursuing a federal banking license that will allow it to provide more services tied to crypto assets to customers in the U.S
A Federally regulated platform could allow the company to handle billions of dollars in tokens mostly from companies participating in initial coin offerings. The ICO sector is one of the booming marketplaces in the burgeoning cryptocurrency sector, where billions of dollars have been raised so far, despite crackdowns from the U.S and Chinese regulators.