Coinbase Exchange has begun addition of support for Binance’s first IEO, Matic Network. This morning, the exchange announces on Twitter,
Coinbase Custody now supports deposits and withdrawals for $
The next step eventually should be addition of trading at the retail and Coinbase Pro exchange. Binance and Coinbase are the leading spot exchange in the world, cross additions of IEOs seems the first step of strategic partnership between the exchanges.
SEC Warning Letter for IEOs
The regulators of stock markets in the US, Securities Exchange Commission recently issued a warning against investment in IEOs, similar to ICOs.
The warning letter states that IEOs could be start-ups and exchanges selling unregistered security offerings. It states,
IEOs may be conducted in violation of the federal securities laws and lack many of the investor protections of registered and exempt securities offerings.
The SEC curbed the ICO mania by requiring the sellers to agree with the Commission first. Nevertheless, the IEOs are vetted by exchanges itself,
The letter also warrants full compliance of the IEOs with the federal securities law. Moreover, the exchanges supporting the platform might require to register with the SEC as well. The letter issued notes,
… the online trading platform on which the IEO is being offered may need to register with the SEC separately as a national securities exchange or operate pursuant to an exemption…
The addition of support by Coinbase could help Matic Network reach enough distribution for it to transform from a security to a commodity like Bitcoin.
Moreover, Matic Network was recently in the news for bad reasons, as the price of $MATIC witnessed a 60% drop due to abnormal selling. Suspicions and accusations were raised on the developers of Matic and Binance as well.
Will Trust and Cooperation between Exchange increase?
In the past, Bitfinex and Okex exchanges have also added support for each other’s native tokens.
As the SEC begins to increase its scrutiny of issuance of tokens on exchanges, assets like Binance [BNB] Coin, Huobi Token [HT], OKB, etc. might come under assessment as well.
Nevertheless, the addition of support at a rival exchange also exposes the assets to the risk of attacks.
Do you think leading exchanges would begin to support the rival’s exchange tokens? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com