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

With the United States Securities and Exchange Commission (SEC) coming hard at crypto entities, Coinbase Global Inc has been named as the partner of choice to help create a crypto trading platform that will be approved by American regulators. According to a Fox Business news report, the national stock 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, the Chairman of the stock exchange IEX, and his team are already in talks with both Coinbase and the relevant regulators to see how the new platform can be birthed. Katsuyama is known as a Wall Street veteran whose exchange was designed to help mitigate the effect 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. Per the report, the trio of Katsuyama, Sam Bankman-Fried, and SEC Chairman Gary Gensler has been meeting prior to the eventual bankruptcy filing of the FTX exchange.

Neither the IEX exchange nor Coinbase has confirmed the proposed partnership, however, a spokesperson for the public bourse said;

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.

The clamor for regulation in the digital currency ecosystem has grown over the past few years. Market leaders like Coinbase CEO, Brian Armstrong have consistently warned that America stands to lose out from crypto innovations should regulators and lawmakers fail to define the core guiding directions for the industry.

IEX Exchange Can be the Difference

While players in the digital currency ecosystem appear confused as to what the regulators truly want, the experience of the IEX Exchange as a Federally regulated stock market can make the difference. 

Most trading platforms that operate in the United States are currently sitting on the edge at this time following the crackdown on Kraken Exchange. The trading firm was fined $30 million earlier this month as the SEC claimed it offered its staking service as an unregistered securities offering.

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

With no one absolutely sure of the dos and don’ts of the regulator, getting in the crosshairs might prove to be a financially costly one in the long term. With the proposed Bitcoin, Ethereum (ETH), and Litecoin (LTC) exchange being proposed by IEX, the very first closure may be given to American investors.

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