$1.6 billion bitcoin exchange Coinbase has turned to M&A to get the licenses needed to run a fully-regulated financial business.
In a blog post Wednesday, Coinbase president and chief operating officer Asiff Hirji announced the acquisition of Keystone Capital Corp., Venovate Marketplace, Inc., and Digital Wealth LLC. Coinbase acquired all three entities through one deal with their parent company, Key Acquisition, LLC, according to a company spokesman.
Those three fintech companies came with credentials near and dear to Coinbase: a broker-dealer license, an alternative trading system license (ATS), and a registered investment advisor (RIA) license.
“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,” Hiriji said in the post.
Coinbase, an industry-leading cryptocurrency exchange, has been slow to add new coins, given that they may be considered a security by the Securities and Exchange Commission (SEC).
The SEC has yet to give formal guidance about which digital tokens it plans to regulate, though it has indicated that it will do so in the near future. Cryptocurrency exchanges, unlike similar companies in the financial space, have so far been unregulated in the United States.
Some of Coinbase’s competitors, like Binance, trade more than 200 different coins. But Coinbase currently trades only four of the biggest cryptocurrencies on the market: bitcoin, bitcoin cash, ethereum, and litecoin.
In late May, Coinbase acquired a trading platform called Paradex which lets users trade “hundreds of coins.”
“The move not only reinforces Coinbase’s commitment to investing in decentralized infrastructure and participating in the nascent world of wallet-to-wallet trading, but also our focus on the international crypto trader,” Coinbase CEO Brian Armstrong said at the time.
It’s unclear when additional coins will be added to the Coinbase platform.
Read more about Coinbase’s mergers and acquisitions strategy.
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