Business 14 June 2018Erik Gibbs
Coinbase acquires Keystone Capital, launches index fund
Coinbase, one of the world’s largest cryptocurrency exchanges, has taken over securities firm Keystone Capital. The purchase, the details of which were not disclosed, is another step in the exchange’s path towards becoming a broker-dealer in the United States.
Through the purchase, Coinbase is poised to receive approval by the U.S. Securities and Exchange Commission (SEC) to offer traditional equities alongside a range of blockchain-based securities. The firm could eventually also offer additional products that are tied to other securities, as well as stocks.
While Coinbase still has to receive SEC approval to operate under the Keystone licenses, the company’s president and CEO, Asiff Hirji, has said he’s confident that there won’t be any issues with the licenses. He added that, once approval is given, Coinbase will need a few months to fully merge Keystone’s operations with its own.
The San-Francisco-based exchange also announced earlier this week that it has launched a new index fund. The fund, which was first detailed in March, is only open to accredited U.S. investors and is designed for those who can invest between $250,000 and $20 million, typically referred to as institutional investors.
On Twitter, Coinbase co-founder and CEO Brian Armstrong described investing in the new index fund as “the easiest way to get exposure to a broad range of crypto assets.” The index fund, he said, is much cheaper than 2 and 20% charged by most crypto hedge funds,” and investors’ new assets are automatically added to the fund as they become available on Coinbase.
Investing in Coinbase Index Fund is the easiest way to get exposure to a broad range get of crypto assets.
Much cheaper than 2 and 20% charged by most crypto hedge funds, and you get new assets automatically added to the fund as they become available on Coinbase. No rebalancing. https://t.co/TyOnDuFMT9
— Brian Armstrong (@brian_armstrong) June 13, 2018
“Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization. As we announced yesterday, the fund will be rebalanced to include Ethereum Classic, and more assets when they are listed by Coinbase in the future,” Armstrong added.
Although the new fund is only available to institutional investors, Coinbase has often mentioned that the company plans to offer additional investment funds that will be “accessible to all investors and cover a broader range of digital assets.”
Coinbase has more than 20 million customers around the world and has traded over $150 billion in assets. The company is on a quest to be the world crypto investment leader and has been actively expanding on several fronts. Apart from the Keystone acquisition, the company recently purchased a peer-to-peer trading platform, Paradex, and has launched a series of products designed for institutional investors.
In April, it created Coinbase Ventures, an investment fund designed for startups that further crypto and blockchain innovation. Of the fund, which already has $15 million earmarked for projects, Coinbase stated, “providing financing to promising early stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way.”
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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