Regulatory hurdles are quickly being swept away as Coinbase has announced they are on track to become regulated broker-dealers. Coinbase is one of the largest cryptocurrency exchanges in the USA and offers Bitcoin, Litecoin, Bitcoin Cash, and Ethereum. As a broker-dealer, Coinbase will officially be regulated by the SEC as well as FINRA. Coinbase is in the process of acquiring a broker-dealer license, an alternative trading system license, and a registered investment advisor license. As per the Coinbase blog:
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.
The lack of regulation in the cryptocurrency market has traditionally been a huge hindrance to investors large and small. Coinbase is moving one step closer to complete regulatory legitimacy and is further ahead of any other exchange concerning compliance. Coinbase is already arguably one of the most regulated exchanges in the world with FDIC insurance on fiat deposits and third-party insurance on cryptocurrency deposits. The network is secured by a team of Silicon Valley experts, and the majority of funds are kept in cold storage.
Coinbase is massively expanding its operations.
The exchange has released a suite of institutional products to attract institutional investors. It is also in the process of creating an office in Japan where it will attempt to take a slice of the lucrative Japanese cryptocurrency market. Coinbase has acquired Keystone Capital Corp, Venovate Marketplace Inc, and Digital Wealth LLC, and recent data suggests they are facilitating a greater share of Bitcoin trade volume, though Asian exchanges still dominate.
The news comes amid two other extremely positive announcements from the cryptocurrency regulatory sector. The SEC has recently appointed a new cryptocurrency chief, who is said to be quite amenable towards regulation, preferring a light touch regulatory policy. And SEC chair Jay Clayton spoke to CNBC and said that cryptocurrencies, such as Bitcoin, are not securities. This is a massive announcement given the uncertainty in the space.
There is much evidence that cryptocurrencies are finally being given the green light from US regulatory authorities. The move could spark the Bitcoin bull run that is confidently expected by all cryptocurrency enthusiasts. When institutional investors do move, they could well step in tandem and truly open the cryptocurrency floodgates. The platform is there, and the regulatory barriers are being removed.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.