Coinbase Acquires Keystone Capital, Gets Into ICO Token Listings

Coinbase's acquisition of Keystone Capital might help it dive into a lucrative market with tokens and ICOs while staying on the SEC's good side.

Large cryptocurrency exchanges like Coinbase definitely attract the attention of regulators like the SEC. As a consequence of this, the prospect of making good on regulatory requirements is highly valuable.

Since its inception, Coinbase has only listed four cryptocurrencies—Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Its reluctance to list tokens came from the fact that it doesn’t want to deal with the red tape behind offering pairings for the US dollar against them.

This has all changed now that Coinbase acquired Keystone Capital, a broker-dealer that trades digital securities. Using the clout it now has with this acquisition, it can offer more blockchain-level securities than simple cryptocurrencies.

“In the United States, some of these [tokens] will be subject to SEC oversight. With this in mind, securing these licenses will bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell, and use many different types of crypto assets,” the company said in its blog.

A few months ago, Coinbase announced support for ERC-20 tokens, but hasn’t really done much since then. The acquisition of Keystone Capital now shows us that the company is serious about offering tokens in its exchange.

This also would have a strong impact on the ICO ecosystem, where startups have difficulty selling their tokens to “nocoiners,” or people who do not own any cryptocurrency. There are also those who already own Bitcoin or Ether and would prefer to purchase tokens using fiat. Coinbase could help serve these demographics.

The company’s announcement shows us that it has bigger plans for this acquisition, however.

“Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets—like 24/7 trading, real-time settlement, and chain-of-title,” Coinbase wrote.