Coinbase recently acquired three financial firms in an effort to become a fully regulated financial institution.

These acquisitions give Coinbase an ATS, broker-dealer, and RIA license. With one announcement, Coinbase has gone from a crypto exchange operating on the fringes of the financial industry to the best positioned company in the industry.

Additionally, Coinbase wrote a blog post that explicitly called out their interest in trading regulated assets on the blockchain - also known as tokenized securities.

One of the greatest battles of the next 3-5 years will be Coinbase & Circle vs the existing public equity exchanges (NYSE, NASDAQ, etc). They will all incorporate this new digital technology, but the prevailing winner will be the first organization to gain mass user adoption.

The incumbents have the advantage - they have a large user base & the largest companies in the world on their exchange. It is really their game to lose. But the crypto upstarts won’t go quietly into the night.

You can expect to see strong competition from each exchange as they work to recruit different asset owners who are looking to list on regulated exchanges. This already occurs today between NASDAQ and NYSE but things should heat up with the addition of Coinbase and Circle.

Lastly, the tokenized security plans of Binance and other large crypto exchanges are unknown. Things would take a wild turn if they decided to jump in as well - we would have a truly global race for regulated liquidity, which would ultimately benefit investors & asset owners the most.

THE RUNDOWN:

Buffett & Dimon vent about Bitcoin: Warren Buffett and J.P. Morgan CEO Jamie Dimon voiced apprehension about Bitcoin during a joint interview. During the interview, the two were asked “which one of you hates Bitcoin more?” “I set a high standard,” Buffett, who has been critical of the cryptocurrency, replied. “I don’t know whether Jamie can top me or not.” “I don’t want to be a Bitcoin spokesman,” Dimon responded. “Just beware.”  Read more.

SEC ‘crypto czar’ discusses ICOs: The SEC named longtime Valerie Szczepanik as its “senior adviser for digital assets and innovation.” On Thursday, she shared some thoughts on how the SEC plans to oversee ICOs. Read more.

Blockchain firm R3 is running out of cash: R3, a startup that last year announced it had raised $107 million to bring blockchain services to the financial sector, is floundering and could be out of money by early next year, according to two former employees of the company. Read more.

Report: $1.1 billion in crypto has been stolen this year: Approximately $1.1 billion worth of cryptocurrency was stolen in the first half of 2018, and it's relatively easy to do, according to cybersecurity company Carbon Black. Read more.

Marijuana cryptocurrency may sponsor Dennis Rodman’s trip to US-North Korea Summit: PotCoin is reportedly in discussions with representatives of Dennis Rodman to sponsor his trip to the US-North Korea summit in Singapore next week. PotCoin is a cryptocurrency created to facilitate transactions within the legalized cannabis industry. Read more.

Binance Labs says decentralization is ‘investment focus sector:’ Blockchain technology incubator Binance Labs did an AMA session devoted to investments in crypto and blockchain projects. Binance Labs’ director Benjamin Rameau said that a lot of current decentralized exchanges suffer from low transactions speeds and scalability problems. Read more.