As of today, Coinbase has 139 tradable assets. The exchange added a whopping 83 assets to its trading list in 2021, nearly double the number of assets it had accumulated in the eight years since its founding.\u00a0<\/p>\n
Is this rapid expansion a simple cash-grab? Are any of these lesser-known tokens and coins securities? Is this irresponsible or overly ambitious? What does this rapid expansion of assets by Coinbase mean? <\/p>\n I feel the answer to the first question is an emphatic \u201cNo!\u201d Coinbase is making a lot of money on trading fees, but its token list expansion is not about the money. Coinbase started out<\/a> with a small booth at a conference \u201cjust trying to make something that customers wanted,\u201d pitching T-shirts and a hosted Bitcoin (BTC<\/a>) wallet. Now, Coinbase is the second-largest crypto exchange in the world. <\/p>\n It\u2019s a common tale that an entrepreneur builds something, finds success, sells and moves on, but Coinbase founder and CEO Bryan Armstrong<\/a> was manning that small booth eight years ago, and is still at Coinbase today. The exchange stays true to its \u2014 and Armstrong\u2019s \u2014 core values: economic freedom, property rights, a more efficient global system of exchange, and in my opinion, just building the things that customers want.<\/p>\n Back in June of this year, Armstrong posted<\/a> a series of tweets indicating Coinbase\u2019s change of approach to determining which assets get listed. To sum it up, Coinbase shifted from a merit-based approach depending on internal criteria to a pragmatic approach based on externalities. This new approach allows the market to decide which assets have the most value \u2014 as it should be. Reminder: Do your own research, even if it is a Coinbase listing.<\/p>\n Related: <\/em><\/strong>The responsibility behind a crypto lender\u2019s asset listing<\/em><\/strong><\/a><\/p>\n Coinbase acknowledges and accepts its leadership role in shepherding in new regulation that is beneficial to the new economy. The exchange really does seem to be aware of its leadership role in the crypto space, and works hard on compliance. It therefore wouldn\u2019t make sense for Coinbase to list a gang of assets that might provoke regulators (in the United States, \u201cnonaccredited\u201d investors are barred from early project investment).<\/p>\n While the Securities and Exchange Commission is treating<\/a> stablecoins as securities, Coinbase\u2019s listing parade has continued almost weekly. It is very likely that there are assets added to Coinbase\u2019s trade pairs that the SEC would deem securities. However, the barriers that currently exist in the name of \u201cinvestor protection\u201d may finally be coming down. Coinbase\u2019s aggressive listing activity squares with the economic freedom, strong property rights, and core values that it supports, and may even hint at undisclosed policy being discussed privately.<\/p>\n As Melissa Strait, chief compliance officer at Coinbase, pointed<\/a> out:<\/p>\n \u201cWe\u2019ve always believed that for crypto to gain the legitimacy needed for mainstream adoption, compliance can\u2019t be an afterthought \u2014 it has to be core to the way we operate.\u201d<\/p><\/blockquote>\n She also added: \u201cWe strongly believe that in order for cryptocurrency to gain widespread acceptance, we must have a constructive relationship with the regulators and agencies that have been charged with oversight of the crypto ecosystem.\u201d<\/p>\n Nearly all the assets listed this year are ERC-20 tokens<\/a> on the Ethereum network. Why? Because they would be deemed \u201csufficiently decentralized.\u201d This phrase is taken from a speech that William Hinman (former director of the SEC\u2019s Division of Corporation Finance) made<\/a> in June 2018. So long as an asset is as decentralized as Etherum was on the day of that speech, it is informally and tentatively not considered a security. Thank you, Hinman! <\/p>\n Related: <\/em><\/strong>Deterring adoption? Balancing security and innovation in crypto<\/em><\/strong><\/a><\/p>\n If there is one thing I have observed in researching this topic, it is that Coinbase is very organized and process-driven. I guess it should be obvious, considering its success. Coinbase\u2019s team is aware of the legal circumstances in which the exchange operates, and has built decision-making systems designed<\/a> to keep pace with this breakneck industry. Armstrong himself said that he wants to on-board a billion customers. Now that\u2019s ambitious! Overly, though? Not if you believe in a free and open financial system beyond the control of any central actor.<\/p>\n Coinbase claims to be \u201cagnostic\u201d on listing tokens. That is, Coinbase doesn\u2019t make any judgement on the projects it lists, but rewards the builders that check all of the boxes of its listing criteria. It is interesting to see the mix of projects that are making it onto the Coinbase platform. After all, a Coinbase listing is like making it to the big leagues. <\/p>\n Coinbase listed 16 DeFi projects in 2021. It doesn\u2019t come at a shock that decentralized finance takes the top spot. First-layer projects came in second place with 12 \u2014 again not really a surprise, as everyone wants to be the next Ethereum. In third place were eight decentralized exchange tokens, while tied in fourth place were stablecoins and NFT gaming, each with seven projects. Taking fifth place were layer-two Ethereum projects.<\/p>\n Coinbase really stepped on the gas this year. It can mean any number of things depending on who you ask. For me, it is a very bullish sign for the overall industry. Coinbase is giving its customers what they want: more choices and more opportunities to find that undervalued gem. It\u2019s up to each individual to do their own due diligence. What some would call the most \u201cuser-friendly\u201d platform around is providing access to a decent number of assets now. Having the freedom of choice is a responsibility \u2014 choose wisely, or you may find that the SEC will feel the need to choose for you.<\/p>\n This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/em><\/p>\n The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n Stephen J. Mesa<\/strong> is the unofficial \u201cambassador\u201d of Cointelegraph Markets Pro. He is a commercial sales manager of lawn and leisure at John Deere Equipment, with 16 years of experience as a real estate market analyst and 10 years designing and installing custom car audio and alarm systems.<\/p>\n<\/div>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2021-12\/e2a08719-db68-41ed-a275-55cccb4c3c9a.png\")
<\/figure>\nA money grab?<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2021-12\/65b7dc35-ce26-426f-b603-77b694fb1fc3.png\")
<\/figure>\nSecurities?<\/h2>\n
Irresponsible or overly ambitious?<\/h2>\n
What now?<\/h2>\n