Coinbase, the number one cryptocurrency exchange platform in the U.S. has scored another significant accomplishment as it continues its rapid expansion push. The popular platform has acquired Keystone Capital, a California-based financial services company. Coinbase announced the deal on June 6, 2018, via a post on the company’s Medium account. It is the latest in a series of high profile moves by the company. The acquisition of Keystone puts Coinbase in a position to become more than a cryptocurrency exchange platform.
Announcing the deal, Coinbase declared that it was on course to become a regulated broker-dealer as long as it receives approval from federal authorities. Coinbase stated the importance of obtaining such a license due to the plethora of virtual assets available today. According to the company, while this increase in the number of cryptocurrencies constitutes the presence of business opportunities, there is also the question of securing the appropriate regulatory approval so as not to run afoul of the law. By so doing, the company can continue to offer premium quality services to its over 20 million customers.
As a cryptocurrency exchange platform, Coinbase limits itself to offering only four digital currencies which include both Bitcoin and Ethereum. The company has refused to list ICO tokens as well as Altcoins like Ripple. This is based on its cautious and methodical approach to SEC regulations. The regulatory status of many cryptocurrency tokens remains unknown with reports that the SEC considers many of them to be securities.
By acquiring Keystone Capital, Coinbase is in line to obtain broker-dealer (B-D), an alternative trading system (ATS), as well as registered investment advisor (RIA) licenses. Commenting on the importance of its latest step, the company said:
“Following our recent announcement of the Coinbase suite of institutional products, we believe this is an important moment for the crypto ecosystem and yet another indication of the maturation of the crypto economy. If approved, these licenses will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products.”
Asides from being able to list Altcoins that are deemed securities, the acquisition of Keystone Capital and the raft of licenses that come along with it will enable Coinbase expand its services beyond the usual cryptocurrency market scene. Commenting on this possibility, the company said it is looking forward to working with investors to tokenize non-crypto securities. This, in effect, can lay the foundation for a massive tokenization drive that introduces the power of distributed ledger technology to the public and private mainstream capital market. Thus, the markets can begin to enjoy some of the benefits of blockchain-based trading which include instantaneous settlements, robust chain-of-title framework, as well as 24-hour trading capability.
Coinbase is making concerted efforts to expand its operations, recently announcing the launch of four new products tailored to institutional cryptocurrency investors.