As the crypto industry eagerly awaits the potential approval of the spot Bitcoin ETF, a major development has gone unnoticed, and that is Coinbase’s ongoing legal drama with the SEC. If the SEC gives the green light for the spot Bitcoin ETF, Coinbase will play a pivotal role by providing trading and custody services to the known major financial institutions. However, this legal battle has been going on for a long time, and the SEC has accused Coinbase of operating as an unregistered exchange, broker, and clearing agency.
The Ongoing Legal Battle
Coinbase’s legal battle with the SEC began over a year ago when the regulator accused the exchange of operating as an unregistered exchange, broker, and clearing agency. Coinbase has refuted these claims and called for new digital asset regulation. The SEC Chair Gary Gensler yesterday again emphasized that crypto exchanges must register with his agency and provide investors with the same level of protection as traditional regulated exchanges and he also cautioned investors to invest in exchanges that are working under regulatory rules.
Implications for Spot Bitcoin ETF Approval
If the SEC approves a spot bitcoin ETF, Coinbase would play a crucial role by providing trading and custody services to major financial institutions such as BlackRock, Franklin Templeton, and Grayscale Investments. However, some experts believe that Coinbase’s ongoing legal battle with the SEC could complicate matters if the SEC wins its case against Coinbase. This could particularly affect Coinbase’s custodial function.
Coinbase’s Role as Custodian for Bitcoin ETF Applicants
Now the question is: why is Coinbase the popular choice? Coinbase has emerged as the go-to choice for custody services among Bitcoin ETF applicants, including financial giants such as BlackRock, Franklin Templeton, and Grayscale Investments, according to a tally by Bloomberg Intelligence.
As potential spot-Bitcoin ETF managers prepare for the approval of the first U.S. spot-Bitcoin ETF, custody services will be a critical component of their operations. Investors rely on custodians to secure their digital assets, and Coinbase’s experience and expertise in this area make it a preferred choice for many applicants. This development highlights Coinbase’s growing importance in the crypto industry and its potential role in shaping the future of digital asset regulation.
To conclude, Coinbase is preparing to potentially play a significant role in the approval of a spot bitcoin ETF, its legal battle with the SEC continues to simmer in the background. The outcome of this legal battle could have significant implications for Coinbase’s future operations and its role in the crypto industry.
Source: https://coinpedia.org/news/coinbase-legal-battle-with-sec-implications-for-the-approval-of-spot-bitcoin-etfs/