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Coinbase, announced that they are on the verge of becoming a broker-dealer, capable of offering crypto securities that will be regulated by the SEC.
Coinbase wants to become a fully licensed broker-dealer through its acquisition of three federally regulated firms: Venovate Marketplace Inc, Keystone Capital Corp, and Digital Wealth LLC.
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.
Our take: Coinbase is working hard to achieve regulatory compliance as the cryptospace strives for mass adoption. With these recent acquisitions Coinbase positions itself as a company that wants to be at the center of everything crypto.
Especially with the Keystone Capital acquisition, which is central to Coinbase’s bid to become a fully SEC-regulated broker dealer.
The main thing that Coinbase gets from the deal are licenses that let it register with the government to offer its customers even more financial services and possibly more altcoins as well.
Given Coinbase’s exposure, as well as the potential threats to their market share from companies like Robinhood, this move is not as very surprising. The broker-dealer status may offer Coinbase a strategic advantage against Circle and Robinhood, which are competing for cryptocurrency customers.