Coinbase, Circle Vie to Create Brokerages for Crypto Securities

Two titans of U.S. cryptocurrency trading are in a race to build the nation’s first regulated venues for tokens deemed to be securities, potentially appeasing watchdogs threatening to rein in the multibillion-dollar market.

Coinbase Inc., one of the largest cryptocurrency exchanges, said Wednesday that it’s buying a trio of firms including a broker-dealer registered with the Financial Industry Regulatory Authority. If U.S. regulators approve, Coinbase will use licenses its obtains to offer customers blockchain-based securities. It will also be subject to more federal oversight.

The announcement came hours after Bloomberg reported that Circle Internet Financial Ltd., one of the world’s most valuable cryptocurrency platforms, intends to pursue registration as a brokerage and trading venue with the U.S. Securities and Exchange Commission so it can help investors buy and sell tokens deemed to be securities. Circle also plans to seek a federal banking license to provide more services to customers.

Read more: Crypto unicorn Circle to expand into realm of regulated banks

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