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Coinbase is on a swing that mirrors the price moves of cryptocurrency. Up one day, down the next.
Is Coinbase a registered security dealer or are they not? That is the multi-billion dollar question that is being put in front of the cryptocurrency sector.
The news over the last few weeks was that Coinbase moved into the realm of traditional brokers by buying a company that was a registered security agent with the regulators. This would put Coinbase, at least from the product offering standpoint, on par with JPMorgan and Goldman Sachs.
Now it appears Coinbase is saying "whoa not so fast".
According to the company, there is no approval from the regulators allowing them to offer securities to the public. This contradicts the reporting over the last few weeks.
Following Coinbase is starting to mirror what it is like to follow Bitcoin.
Full article along with reader comments found at zerohedge.com
Authored by William Suberg via CoinTelegraph.com,
Crypto exchange and wallet Coinbase has retracted its previous statement that it received approval from the U.S. Securities and Exchange Commission (SEC) to trade in securities, Bloomberg reports July 18.
*Image courtesy of cointelegraph.com
Last week, Coinbase reported that it could now operate as a broker dealer, offering digital tokens considered to be securities, after its acquisition last month of Keystone Capital Corp., Venovate Marketplace Inc., and Digital Wealth LLC.
As reported at the time, the acquisition occurred with the blessing of two regulators: the SEC and Financial Industry Regulatory Authority (FINRA).
Coinbase has since reversed its statement, telling Bloomberg it had not in fact received any such regulatory endorsement.
In emailed comments to Bloomberg, Coinbase spokeswoman Rachael Horwitz wrote that it is “not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because SEC was not involved in the approval process.”
While FINRA “declined to comment” on the matter, the SEC confirmed that they did not give Coinbase “explicit approval” for the deal. Horowitz wrote that Coinbase’s communication with the SEC had instead been of an “informal” nature, noting
“The SEC’s approval is not required for the change of control application. Coinbase has discussed aspects of its proposed operations, including the acquisition of the Keystone Entity, on an informal basis with several members of SEC staff.”
Several other crypto-related companies have also reportedly begun the process of seeking similar licenses with U.S. regulators.
At the beginning of June, stock and crypto trading app Robinhood was rumored to be in talks to obtain a U.S. banking license. Peer-to-peer payments app Circle has also been pursuing both a banking license and registration as a brokerage and trading venue with the SEC.
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