BREAKING: Coinbase to create fully federally regulated Bitcoin, Ethereum and Litecoin exchange

• IEX Exchange is reportedly in talks with Coinbase to create a federally approved crypto exchange.
• The change will be the first to be fully approved by the US SEC.

With the United States Securities and Exchange Commission (SEC) coming down hard on crypto entities, Coinbase Global Inc has been named the preferred partner to help create a crypto trading platform that will be approved by US regulators. According to a Fox Business news reportthe national exchange firm, IEX Exchange is the key brain behind the proposed crypto exchange while Coinbase will be a partner firm.

According to the report, Brad Katsuyama, chairman of the exchange IEX, and his team are already in talks with both Coinbase and the relevant regulators to see how the new platform can be born. Katsuyama is known as a Wall Street veteran whose stock exchange is designed to dampen the effects of high-frequency trading.

The plan to float a trading platform that will be licensed by the SEC had been in place with FTX Derivatives Exchange as the first choice. According to the report, the trio of Katsuyama, Sam Bankman-Fried and SEC Chairman Gary Gensler have met before the eventual bankruptcy filing of the FTX exchange.

Neither the IEX exchange nor Coinbase have confirmed the proposed partnership, but a spokesperson for the public exchange said;

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

The demand for regulation in the digital currency ecosystem has grown in recent years. Market leaders such as Coinbase CEO Brian Armstrong have consistently warned that America stands to lose out on crypto innovation if regulators and lawmakers fail to define key guidelines for the industry.

IEX exchange can be the difference

While players in the digital currency ecosystem seem confused about what regulators really want, the experience of the IEX Exchange as a federally regulated stock market could make the difference.

Most trading platforms operating in the US are currently sitting on edge at this time following the attack on the Kraken Exchange. The trading company was fined $30 million earlier this month when the SEC claimed it offered its betting service as an unregistered securities offering.

While the move by Kraken angered the ecosystem, Paxos Trust, the issuer of the Binance USD (BUSD) stablecoin may also be charged by the SEC for investor protection violations. The regulator has faced backlash for this move from the wider crypto and financial community with a renewed intensity for regulatory clarity.

Without anyone being completely sure of what the regulator must and must not do, in the long term it may prove to be financially costly to get caught up in the matter. With the proposed exchange of Bitcoin, Ethereum (ETH) and Litecoin (LTC) proposed by IEX, the very first closure can be given to US investors.

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