Coinbase again does, what it’s slowly becoming famous for, withdrawing from to news that puts it into the limelight. In less than 24 hours of the news that, Coinbase Inc gets green signal to become First Regulated Trading Platform to Add Security Coins, the company has taken a complete U-turn saying that it does not have approval’s yet in place from SEC and FINRA to go ahead with the acquisition that gives it a Broker-Dealer License.
Informal discussion and not approval. as the story developed
The company last month had announced that it had filed for approval from the U.S. SEC and the FINRA for the acquisition of Keystone Capital Corp., Venovate Marketplace, Inc., and Digital Wealth LLC, the acquisitions that were to give Coinbase access to broker-dealer license (B-D), an alternative trading system license (ATS), and a registered investment advisor (RIA) license. Yesterday the media circuit was bussing as Bloomberg reported, that according to company sources the exchange had received both approvals from SEC and FINRA.
But what comes out now, as the exchange clarifies on Bloomberg again that they had an informal discussion with key SEC members and released a statement following that meeting where the members explained SEC involvement is unnecessary for its proposed purchases.
In an email dated yesterday, Rachael Horwitz, spokesperson for Coinbase, said,
“It is not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because SEC was not involved in the approval process.”
“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.”
According to the announcement on their blog, Coinbase is envisioning to become a registered and regulated broker and dealer also want to establish itself as a leading cryptocurrency exchange in the market. So even if the exchange doesn’t receive an approval from the SEC, it will still go ahead with the acquisitions.
Coinbase losing the trust of the crypto community
Since Coinbase is at a position where it holds quite a bit of sway in directing attention and enthusiasm within the broader blockchain/cryptocurrency space its retracements from the news is not taken very positively especially after it has already faltered a couple of time
Coinbase had faced similar heat last year surrounding the rollout of Bitcoin Cash after numerous users suspected the exchange’s employees of making gains from advanced knowledge of the news after the token’s value swelled preceding the announcement. It is believed that Coinbase was forced to investigate after the launch was delayed with service outages as the price of the new addition fluctuated wildly.
Last year in August, when Coinbase had altered its position on the Bitcoin hard fork, saying it will not unconditionally support the BTC chain.
Its news of testing 5 altcoins to the likes of Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), 0X (ZRX) was also not taken well by the community as Coinbase was believed to be announcing test but not actually listing coins. Kraken, the competing exchange too took a falk at it when it tweeted of testing all 1600 cryptos on its exchange.
The XRP community also blamed the exchange as one of the users asked FINRA to look into the matter as the exchange ignored much larger coins including XRP which could have been considered
Slowly and steadily this retracting business of Coinbase is making it lose its credibility. Its image in the community is slowly dipping and if this continues it will lose the impact that it has one every announcement that it makes.
Do you think Coinbase is playing bad by retracting to news or is it the media anticipating too much before the actually announcements come in? Do let us know your views on the same.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.