Coinbase, Circle Vie to Create Brokerages for Crypto Securities

Acquiring that trio would give the exchange licenses to operate as a broker dealer, an alternative trading system and a registered investment adviser. Alternative trading systems operate outside traditional public stock exchanges.

“This is an important moment for the crypto ecosystem, and yet another indication of the maturation of the crypto economy,” Coinbase said in a statement that didn’t include terms. The moves “will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter trading.”

Coinbase currently lets users buy and sell Bitcoin, Bitcoin Cash, Ether and Litecoin. Customers have urged the company to add assets, but it has held off amid concerns that U.S. regulators could deem more digital tokens to be securities.

If approved, the deal could alleviate those worries and allow Coinbase to significantly expand the number of coins it lets customers trade.

Welcoming Oversight

The transaction would put Coinbase under the oversight of the SEC and Finra. Until now, it has mostly been regulated by a patchwork of state authorities. The SEC has said platforms handling digital assets deemed to be securities must register or qualify for an exemption.

Institutional investors prefer working with firms that are regulated, Adam White, general manager of Coinbase’s institutional arm, said in an interview. He said it’s hard to predict how soon authorities might approve the move.

“This is not only a good thing for our company but a good thing for our industry,” he said. “We’re going to move at pace at which regulators are comfortable.”

Ultimately, Coinbase said, it envisions a future in which regulators may let crypto platforms turn existing securities into tokens. That would enable around-the-clock trading all week.