Coinbase announces that US regulators have given the exchange the thumbs-up to list coins that are considered securities.
Regulators have struggled to deal with Bitcoin and other cryptocurrencies. Should they be considered commodities? Securities? Something else entirely? Of course, cryptocurrency enthusiasts prefer that regulation stay far away from their beloved coins, but that reality will never happen. In the United States, the IRS treats cryptocurrency as property and holders are liable for capital gains. US-based exchanges have struggled to comply with an increasing number of regulations, but Coinbase may have just upped the ante a bit.
A Big Move
Coinbase, the San Francisco-based exchange, announced a major development today. The federal government has given the go-ahead for the exchange to trade coins that are considered securities.
This permission slip was signed by the US Securities and Exchange Commission and the Financial Industry Regulatory Authority. Basically, the exchange was given the okay to buy Digital Wealth LLC, Keystone Capital Corp., and Venovate Marketplace Inc., allowing the company the ability to list said securities-featured coins.
This is pretty big news for several reasons. One, it allows the exchange to operate under federal guidelines, instead of the mish-mash of state guidelines it has previously been operating under. Another key factor is that the exchange can handle coins offered during an ICO due to the fact that Coinbase will be a lawfully regulated trading platform. This is potentially huge for US-based investors who often find themselves locked out of ICOs.
While many bristled at how closely the exchange has worked with centralized authorities, such endeavors are now going to pay off handsomely. Coinbase will be able to function as a registered investment adviser and broker dealer. This all boils down to the fact that the platform will have a piece of the ICO pie, which is worth billions.
Coinbase has been a busy bee in 2018. While the exchange was caught shorthanded during the bull run in late 2017, the company has hired a great deal of additional support staff and cut their backlog down by 95 percent.
The platform has also added support for Ethereum Classic to its small stable of tradable coins. Then there’s the rollout of Coinbase Custody, one of their new tools for bringing massive institutional investors into the cryptocurrency marketplace.
Altcoin fans are also in a tizzy as the exchange recently announced that they were considering adding Cardano, Stellar Lumens, Zcash, Basic Attention Token, and 0x. Of course, this announcement does not mean that the coins will be added. The exchange’s blog notes:
Unlike the ongoing process of adding Ethereum Classic, which is technically very similar to Ethereum, these assets will require additional exploratory work and we cannot guarantee they will be listed for trading. Furthermore, our listing process may result in some of these assets being listed solely for customers to buy and sell, without the ability to send or receive using a local wallet.
Overall, Coinbase is having a ripping year, despite the fact that the cryptocurrency market has declined greatly in market capitalization. The ability to list coins considered securities is going to be significant.
What do you think about this new development for Coinbase? Let us know in the comments below.
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