Coinbase recently announced the acquisition of Keystone Capital Corp so that it can operate as a broker- dealer. With the acquisition of the Californian FINRA-registered financial firm, now Coinbase can operate as an alternate trading and registered investment system. With this development, the cryptocurrency service has now got a stronger regulatory standing with the Securities and Exchange Commission (SEC) as it can offer both a broader platform of blockchain-based securities as well as traditional equities.
Approvals To Take Several Months
According to Coinbase, this move will enable it to offer future services including crypto securities trading, over-the-counter trading, and margin. Even though the cryptocurrency service has acquired the Californian firm, it will require regulatory approval to carry out operations under the license of Keystone. The COO of Keystone, Asiff Hirji recently said that they are expecting the approvals to come in several months. Coinbase will be able to start working as a broker-dealer and integrate the operations of Keystone in its services only after these approvals. Both the services have not disclosed the terms of the deal.
Coinbase is eyeing the opportunities that can be raised through ICOs as more startups are eager to produce their security tokens. Statistics indicate that more than $13 billion has been generated through so-called initial coin offerings (ICO)s since the start of 2017. But raising amount through ICO has really picked up in 2018 with the startups generating $6.3 billion in the first quarter of this year via ICO. Until now Coinbase has successfully raised $225 million from investors but in the wake of growing competition in the U.S., it will have to develop new tactics.
Keystone Acquisition To Open New Opportunities For Coinbase
Currently, Coinbase trades only four types of digital currencies including Bitcoin (BTC), and Ethereum (ETH) despite being the largest U.S. cryptocurrency exchange. The company is pretty cautious about its approach mostly because of the indication from SEC that it considers only those digital tokens as securities that are registered.
However, after Keystone integrates completely in Coinbase, the licenses will open doors for new business opportunities for the cryptocurrency exchange as it will be able to provide services to other institutional businesses. Moreover, it will also have the option to expand into other securities or product tied to stocks.