Coinbase just announced yet another acquisition. This time, the company is looking at the broker-dealer side of its operations when it chose to acquire Keystone Capital Corp, a financial firm based in San Francisco.
Keystone Capital will now be under stricter regulations coming from the Securities and Exchange Commission as it will be involved in blockchain-based securities on top of its usual equity offerings.
Coinbase shared why the acquisition happened in a blog post:
“Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement, and chain-of-title. We believe this will democratize access to capital markets for companies and investors alike, lowering costs for all participants and bringing additional transparency and inclusion to the ecosystem.”
Although Coinbase is the largest cryptocurrency exchange in the US, it only allows the trading of four cryptocurrencies as of now: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. This shows the company’s careful approach when expanding its offerings to ensure compliance with the SEC.
The partnership with Keystone Capital Corp improves Coinbase’s position when it comes to registering digital tokens as securities while greatly increasing its financial product offerings to its huge customer base. The move also goes perfectly with its newly rebranded professional trading platform – Coinbase Prime which is a platform that gives institutions access to financial custodial services.
The move also looks good for Coinbase in a time where several other large crypto exchanges have been coming in to compete for investors of cryptocurrency. Registering as a broker-dealer is a game changer for the company since the company can now be classified as an Alternative Trading System (ATS). This category is where federal laws have a soft spot on when it comes to granting exemptions for companies offering securities. By acquiring Keystone Capital, Coinbase now enjoys the same status as Keystone in the eyes of crypto-related regulations.