- Coinbase says it doesn’t need SEC approval to trade security tokens
- It already has FINRA approval
- New acquisitions will take Coinbase one step closer to trading security tokens
A few days ago, Coinbase made business headlines when it announced that it has received approval from the United States Securities and Exchange Commission to proceed with three acquisitions that could enable the firm to trade security tokens.
The exchange has, however, now backtracked.
Coinbase Spokesperson Rachael Horowitz now says the firm never received approval from the regulatory agency to go ahead with the acquisition of Venovate Marketplace, Keystone Capital and Digital Wealth.
In fact, she said such an approval was never necessary because the approval of the Financial Industry Regulatory Authority (FINRA) was sufficient.
Horowitz said: “It is not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because SEC was not involved in the approval process.”
Although Coinbase did have informal consultations with certain SEC members, she added, its approval was not necessary for the acquisitions.
This view was supported by Multicoin Capital Managing Partner Kyle Samani, who said there was no legislation preventing Coinbase from adding security tokens to its listed trading instruments.
In addition to enhanced federal oversight, the acquisitions mean that Coinbase will have licenses to do business as a broker dealer, a bona fide investment adviser and an alternative trading system.
On Monday, Coinbase said that acquiring the three firms was just one step toward ultimately allowing its clients to trade security tokens on the platform, and that many more steps were still needed.
The acquisitions come at an interesting time for the company. Last week, it announced that it was growing its list of supported cryptocurrencies, which already included Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic. The new additions will be Basic Attention Token, Cardano, Zcash, Stellar and Ox.