Coinbase and the SEC Establish a Formal Relationship, Only to Backtrack Days Later

The crypto market’s penchant for volatility extends to the ancillary service providers playing in the space. Less than two weeks after Coinbase announced a partnership of sorts with the SEC, they’ve walked back the news that seemed to light a spark in the 2018 bear market.

The cryptocurrency firm had told Bloomberg News that it received approval from the SEC and the Financial Industry Regulatory Authority to buy Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC. The acquisitions are part of Coinbase’s plan to operate as a broker dealer and at some point list digital coins that are deemed securities.

“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,” Coinbase spokeswoman Rachael Horwitz said in an email Tuesday. An SEC spokeswoman also said that the agency did not give San Francisco-based Coinbase explicit approval for the deal. A spokesman for FINRA declined to comment.

“The SEC’s approval is not required for the change of control application,” Horwitz said. “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.”

BTC price is holding steady in the face of the Coinbase, SEC two step. It’s logical that BTC and other cryptos were due for a bounce after a sluggish Q2. (link to Bloomberg story).