🧙‍♂️ Coinbase has a trick up its sleeve

Security tokens could trade on Coinbase and IX Swap is live!


Welcome to the 28 new Rainmakers who have joined us since last week. Join the 2,495 others who are laughing, learning, and staying at the forefront of tech every week!

Gooood morning, Rainmakers! ☀️

As always, I have two captivating topics for you to dive into:

1️⃣  🧙‍♂️ Coinbase has a trick up its sleeve: Coinbase has a fallback plan if some of the cryptocurrencies trading are deemed unregistered securities!

2️⃣  🤝 CeFi Meets DeFi: IX Swap - the DeFi secondary trading venue for security tokens just went live! What's trading?

Without further ado, it's time to…

Get liquid 💧

🧙‍♂️ Coinbase has a trick up its sleeve

Here in the US, Coinbase is unanimously seen as the most utilized application to purchase cryptocurrencies.

The reason behind that is they were the first application to bring frictionless fiat on-ramps to the mainstream.

Frictionless processes always win!

I got into crypto in the midst of the ICO boom and at this point in time, there were only 3 cryptos trading on Coinbase: Bitcoin, Ethereum, and Litecoin.

There came a time that whenever a new asset was added to Coinbase, the value would skyrocket because the coin now had access to a much wider audience.

That has changed quite a bit, as there are now 100s of coins trading - from Shiba Inu to Bitcoin - there's an option for everyone.

Where does Coinbase go from here? Add more tokens? NFTs? Security tokens?

The answer is all 3 but under SEC regulation!

In fact, Coinbase may be in hot water as they are being sued in a class-action for allegedly selling 79 unregistered securities - including XRP, Dogecoin, and Shiba Inu.

If some of those cryptos are deemed unregistered securities, it's okay because Coinbase has a major trick up its sleeve! 😏

That trick of theirs is the ability to trade security tokens!

Yep, back in the day in 2018, they acquired Keystone Capital - a registered broker-dealer/alternative trading system (ATS).

If any coins traded on Coinbase are seen as illegal securities - then, in theory, Coinbase can simply have them trade on the ATS they acquired 4 years ago.

I'm not for certain where the Keystone Capital relationship exists today, but it looks to me they have been thinking ahead to mitigate this risk and are more than ready to take this on!

It appears Coinbase isn't the only one thinking ahead as Gemini also received approval to trade security tokens.

This could be the next frontier and Coinbase and Gemini are positioned to go head-to-head!

🤝 CeFi Meets DeFi

Everyone, please give a warm welcome to IX Swap - the newest security token marketplace on the block!

IX Swap is one of the 1st DeFi AMM & liquidity pools for security tokens and tokenized stocks!

Let's get basic on AMMs/Liquidity Pools:

First, let's take a step back.

In order for a trade to be conducted (traditionally) there needs to be a buyer or seller on the other side of the trade.

That is changing forever - with DEXs, you actually don't need to have a buyer or seller on the other side of the transaction.

In DEXs users trade against a pool of tokens — a liquidity pool.

So in essence, if you own some sort of cryptocurrency - instead of relying on a seller or buyer on the other side, you can trade it against different cryptos.

This enables liquidity 24/7 for the investor.

Last week, I covered their strategic partner InvestaX and their investment via Coinbase Ventures.

InvestaX has the legal approval to operate a fully-compliant security token exchange and IX Swap has the technology to facilitate DeFi liquidity solutions for security tokens.

I love this partnership as it has the potential to bring consistent and significant volume to the industry.

This could be an inflection point for the secondary trading volume of security tokens.

The marketplace will be operating in the Singaporean jurisdiction, so US investors are unfortunately barred from participating.

The first security token to be listed is the Millennium Sapphire security token (MSTO).

It represents fractionalized ownership in the Millennium Sapphire®, which is a natural sapphire discovered in Madagascar that was carved as a tribute to the creative genius of humanity!

I'm hoping that IX Swap will succeed not only in terms of trading but in terms of compliance so that the SEC will be more open to these types of trading venues. 

Time will tell!

💦 What else is Drippin’

  1. Crypto Con Leche ☕️ : Our all-Spanish show's first episode is now live! Check out our very own Jason and Luis talk tokens in Spanish!
  2. Anchorage Digital Becomes Core Custodian for Nasdaq Crypto Index: Anchorage will handle custody for this index - the only federally chartered crypto bank!
  3. INX Releases Quarterly Report: Find out what INX has been up to!

Thanks for tuning in! Keep an eye out each Monday for the next security token adventure 🧗‍♀️

Disclosures:

• No money or other consideration is being solicited, and if sent in response, will not be accepted; 

• No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through the platform of an intermediary (funding portal or broker-dealer); and 

• A person’s indication of interest includes no obligation or commitment of any

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