Uphold, a cryptocurrency and global currency exchange, just made a major move toward becoming a licensed securities trader.
On Wednesday, Uphold announced its plans to acquire JNK Securities Corp., a registered broker-dealer that has the licenses necessary to trade any cryptocurrencies that may be regulated as securities by the US Securities and Exchange Commission.
“We’ve been following what the SEC and other regulators have been saying very closely, and we’re aware of their view that many tokens may be considered securities,” Uphold’s general counsel, Ben Sherwin, told Business Insider.
“There’s some uncertainty, so we’re trying to stay at the forefront, and we believe that this is the direction that things are moving,” Sherwin said.
Cryptocurrency exchanges in the US have historically gone unlicensed since US regulatory agencies haven’t taken an official stance on whether cryptocurrencies are considered securities.
Earlier this month, the agency indicated that it didn’t view the two most popular coins, bitcoin and ether, as under its jurisdiction, though the SEC is expected to formally regulate many of the smaller cryptocurrencies as securities in the near future.
Uphold, which traded 30 currencies including eight cryptocurrencies, has also filed applications with the Financial Industry Regulatory Authority. Once that’s approved, Uphold said, it will apply for an alternative-trading-system license with the SEC.
Once it has these licenses, Uphold will be able to sell and trade the tokens generated through initial coin offerings with oversight from regulatory bodies.
Coinbase, a competitor of Uphold, announced a similar acquisition on June 6 — a deal that gave the bitcoin exchange a broker-dealer license, an ATS license, and a registered-investment-adviser license.
JNK Securities Corp., which does trading and research for institutional clients, will continue to operate its existing businesses.
The terms of the deal were not disclosed.
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