Coinbase is also seeking to add more cryptocurrencies for withdrawal, on all of its platforms. It said it will add more crypto assets as soon as there is regulatory clarity about cryptocurrencies.
San Francisco-based Coinbase is seeking to license with the US Security Exchange Commission to become a brokerage firm and electronic trading venue.
This follows a meeting between officials of the two companies in the recent past weeks. This licensing would allow Coinbase to list digital tokens listed as securities by SEC.
The move comes even as there is uncertainty about crypto regulation. For instance, SEC is yet to decide or list cryptocurrencies that are considered as securities. SEC recommends that crypto projects follow the Howey test created by the supreme court in 1946 to determine if a digital token can be considered an unconventional financial vehicle thus needing to follow same regulations as stocks and bonds.
Expanding token offering
Coinbase is on the move to expand its offering to more than Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. It announced an intention to list Bitcoin forks for withdrawals on all of its platforms. Hence the move to register with SEC as a brokerage firm and electronic trading venue is that strategic.
Coinbase President Asiff Hirji told CNBC that they would list more assets as soon as there is better regulatory clarity on cryptocurrencies than there is right now.
Regulations could also require token issuers to provide full financial disclosure to customers.
Additionally, other exchanges including Bitfinex and Gemini are also moving on to expand their coin listings. Gemini said it would add more tokens possibly starting with Bitcoin cash and Litecoin.
The move by Coinbase to register may encourage other exchanges to do so. Templum LLC is another company registered with SEC as a brokerage firm and alternative trading system to provide regulated token trading.
Coinbase runs into issues with regulators earlier on as IRS asked it to disclose customer trading information. The exchange forwarded information on 14,000 customers who had transacted over $20,000 between 2013 and 2015.