Coinbase to acquire Keystone Capital in vital move for crypto trading

7 Jun 2018

Image: Wit Olszewski/Shutterstock

Coinbase plans to use Keystone acquisition to get an early advantage in the market for SEC-regulated trading of blockchain-based crypto assets.

Cryptocurrency exchange Coinbase has revealed plans to acquire Keystone Capital, a key step in the company’s goal to become a fully regulated broker-dealer.

It is a vital move for the cryptocurrency and initial coin offering (ICO) space because it could result in an alternative trading system for the myriad but disparate raft of ICOs launched by start-ups hoping to raise money through token sales, for example.

‘Our goal is to be the most trusted way for our customers to buy, sell and use many different types of crypto assets’

The terms of the deal were not disclosed and Coinbase will need regulatory approval.

Time to make crypto assets less cryptic

Keystone Capital is a California-based and Financial Industry Regulatory Authority-registered (FINRA) broker-dealer.

Coinbase chief operating officer and president Asiff Hirji said in a Medium post that the company is on a path to list SEC-regulated crypto securities.

“Today, we’re announcing that Coinbase is on track to operate a regulated broker-dealer, pending approval by federal authorities.

“If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US SEC and FINRA.

“This step forward is being made possible by our acquisition of a broker-dealer licence (B-D), an alternative trading system licence (ATS) and a registered investment adviser (RIA) licence.”

Hirji said that there are now many types of blockchain-based digital assets, from cryptocurrencies to security tokens to collectibles.

“In the US, some of these assets will be subject to SEC oversight. With this in mind, securing these licences will bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell and use many different types of crypto assets.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years