Coinbase has retracted reports of obtaining SEC approval for a trio of acquisitions in its quest to become a broker-dealer. The company also said it only discussed aspects of the deal with SEC officials and didn’t require the Commission’s go-ahead. This is the second time in as many days where a significant piece of news in the industry has been retracted or denied.
Coinbase Didn’t Receive SEC Endorsement
Reports emerged on Monday (July 16, 2018) that Coinbase had obtained approval from the United States Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to acquire three companies. These companies were Keystone Capital, Venovate Marketplace Inc., and Digital Wealth LLC. The acquisitions enabled Coinbase to operate as a registered broker-dealer for the crypto securities market.
However, the company retracted those reports, yesterday, (July 17, 2018). In an email to Bloomberg, Coinbase spokesperson, Rachael Horowitz, said:
It is not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because [the] SEC was not involved in the approval process.
SEC Approval Was Not Required
Horowitz also went on to say that the Commission’s approval was not required for the deal. According to Horowitz:
The SEC’s approval is not required for the change of control application. Coinbase has discussed aspects of its proposed operations, including the acquisition of the Keystone Entity, on an informal basis with several members of SEC staff.
The retraction from the San Francisco-based cryptocurrency exchange platform is the second significant news to be retracted or denied in as many days. Reports also recently emerged that BlackRock was putting together a team to examine the merits of crypto-based investments. However, a few hours later, company CEO, Larry Fink dismissed those claims.
In the meantime, cryptocurrency investors will also be wondering what is to become of Coinbase’s bid to be a regulated broker-dealer. The main highlight of the plan is the listing of ICO tokens. The SEC has frequently classified ICO coins as security tokens. The following days and weeks will likely shed more light on the matter.
Are you concerned about the mixed reports that seem to be becoming a theme in the market? Keep the conversation going in the comment section below.