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US: Coinbase acquires securities firm

 |  June 7, 2018

With the rise of the ICO and a host of startups making digital tokens all their own, the question arises: what to do with all of those tokens?

Theoretically, they should be tradable, but there are few places were those trades can happen.

Coinbase wants to help and to do so, it is acquiring securities dealer Keystone Capital, a California-based FINRA-registered broker-dealer, which will allow the firm to run an alternative trading system. Currently, Coinbase lets crypto enthusiasts trade in the larger and better-known crypto forms.

Coinbase, by its own estimation, is embarking on a journey to “offer future services that include crypto securities trading, margin and over-the-counter trading.”

The exact terms of the deal remain unknown — and Coinbase will need the green light from regulators to operate under the Keystone licenses. Coinbase COO Asiff Hirji noted his firm will still need a few months after those approvals happen (or not) to integrate Keystone’s operations.

ICOs are a lucrative area in which to dip a toe — $13 billion has been raised in ICOs since the beginning of last year, $3 billion of which has been made since the start of the year. Building an appropriate locale for those coins to be traded is Coinbase’s goal — but its not the only company with this vision.

Robinhood is also an FINRA-approved broker-dealer that recently began offering cryptocurrency trading. Circle, a strongly backed crypto trading platform, also has big ambitions. In February it acquired Poloniex, one of the world’s most active cryptocurrency exchanges. It is also, according to reports, seeking a banking license.

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