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"SEC Opens Floodgates for Crypto ETFs, Coinbase Revamps Token Listing Process"

Coin WorldMonday, Jan 27, 2025 3:59 am ET

1min read

The floodgates have opened for cryptocurrency exchange-traded funds (ETFs) as the U.S. Securities and Exchange Commission (SEC) has ended its controversial crypto custody rule. The move, which aligns with President Donald Trump's initiative to encourage innovation and adoption in the crypto sector, has been celebrated by industry experts. The repeal of Staff Accounting Bulletin No. 121, which compelled financial institutions to classify customer-held digital asset exposures as liabilities, has been hailed as a potential gateway for banks and crypto firms to enter the digital asset market without facing the obstacles created by the rule.

The decision simplifies reporting by removing the need to list both the assets and liabilities of customer-held digital assets, promoting a more supportive environment for offering crypto custody services. This change paves the way for greater integration of digital assets into traditional financial services. The SEC has also created a task force on crypto regulation, signaling an adaptation of its stance on digital assets in the United States. Additionally, the PCAOB amendment was approved by the SEC for January 2025, introducing registration procedures for accounting firms with no operating practices.

Meanwhile, Coinbase, the largest cryptocurrency exchange in the US, is revamping its token listing process to address the challenges brought by the rapid growth of new cryptocurrencies. With the number of tokens created weekly now exceeding 1 million, the platform is exploring new strategies to manage the surge. Coinbase CEO Brian Armstrong announced the need to reconsider the platform's current system, stating that manually evaluating each token is no longer feasible. He proposed moving from the current "allow-list" system to a "block-list" approach, using automated on-chain data scans and community feedback to identify and exclude risky tokens while streamlining the listing process.

In addition to revising its token evaluation strategy, Coinbase plans to strengthen its integration with decentralized exchanges (DEXs) to simplify trading for users, making it seamless regardless of whether transactions occur on centralized exchanges (CEXs) or DEXs. The explosion of token creation has underscored the urgency of these changes, with over 36 million tokens in the crypto market and projections suggesting that number could reach 100 million by 2025. Platforms like Solana-based Pump.fun and Tron-based SunPump have significantly contributed to this growth by democratizing the token creation process.

As the industry continues to expand, Coinbase

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