Coinbase in Talks to Create a Federally Regulated Crypto Exchange

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Amid heightened regulatory scrutiny of the cryptocurrency industry in the wake of the FTX implosion and resulting large-scale market meltdown, Coinbase and IEX are reportedly considering teaming up to address the issue. underlying and create a regulated crypto trading platform.

Indeed, the management of the publicly traded crypto exchange and the exchange have begun talks to establish a federally approved digital asset market, according to the sources with direct knowledge of the matter, Fox Business reported on 21 FEBRUARY.

Specifically, IEX Chairman Brad Katsuyama previously met with U.S. Securities and Exchange Commission (SEC) officials, including his boss Gary Gensler, to discuss founding the first crypto exchange that would have its unambiguous endorsement.

Specific proposals to be finalized

According to the IEX spokesperson:

We continue to review ways to help provide a regulatory pathway for digital asset securities, including conversations with regulators and other market participants, but have not finalized any specific proposals that include third parties. .

Interestingly, the original plan called for a partnership with FTX founder Sam Bankman-Fried (SBF), as he and Katsuyama held proposal meetings with SEC officials around the time FTX filed for bankruptcy in November. , according to Gensler’s public timeline.

However, IEX was forced to find a new partner as SBF is currently facing a federal indictment alleging widespread fraud, costing FTX clients and investors billions. He remains under house arrest until his trial in October, which could end with him being locked up for up to 115 years as other FTX executives are expected to testify against him as part of their plea deals.

Coordinated Attacks on Crypto?

As a reminder, the crypto industry found itself between a rock and a hard place after crypto exchange Kraken agreed to shut down its US staking services and pay a $30 million fine. to settle charges with the SEC, which accused him of violating securities laws.

Shortly after, cryptocurrency firm Paxos was forced to stop issuing the Binance token pegged to the BUSD dollar and is now facing charges from the SEC for selling the stablecoin it considers as a security, in what CoinMetrics co-founder Nic Carter described as a coordinated asset. effort to marginalize the industry and cut its connectivity to the banking system.

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