Amid the heightened regulatory scrutiny over the cryptocurrency sector following the implosion of FTX and the resulting wide-reaching market collapse, Coinbase and IEX are reportedly considering teaming up to address the underlying problem and create a regulated crypto trading platform.
Indeed, the leadership of the publicly traded crypto exchange and the stock exchange have entered talks to establish a federally approved digital asset marketplace, according to the sources with direct knowledge of the matter, Fox Business reported on February 21.
Specifically, IEX’s chairman Brad Katsuyama previously met with officials from the United States Securities and Exchange Commission (SEC), including its boss Gary Gensler, to discuss the foundation of the first crypto exchange that would have his unambiguous approval.
Specific proposals to be finalized
According to the IEX spokeswoman:
“We continue to consider ways that we can help provide a regulatory path for digital asset securities, including conversations with regulators and other market participants, but have not finalized any specific proposal that includes any third parties.”
Interestingly, the initial plan included partnering with the FTX founder Sam Bankman-Fried (SBF), as both he and Katsuyama held proposal meetings with the SEC’s officials nearly to the time when FTX filed for bankruptcy in November, according to Gensler’s public calendar.
However, IEX has been forced to find a new partner, as SBF is currently facing a federal indictment alleging widespread fraud, costing FTX customers and investors billions. He remains under house arrest until his trial in October, which could conclude with him being locked up for up to 115 years as other FTX executives are expected to testify against him under their plea deals.
Coordinated attacks against crypto?
As a reminder, the crypto industry has found itself between a rock and a hard place after the crypto exchange Kraken agreed to shut down its staking services in the U.S. and pay a $30 million fine to settle the charges with the SEC, which accused it of breaking the securities laws.
Soon after, the cryptocurrency firm Paxos was forced to stop issuing the dollar-pegged Binance token BUSD and is now facing accusations by the SEC over selling the stablecoin it considers a security, in what CoinMetrics co-founder Nic Carter described as “a well-coordinated effort to marginalize the industry and cut off its connectivity to the banking system.”
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Source: https://finbold.com/coinbase-in-talks-to-create-a-federally-regulated-crypto-exchange/