Coinbase’s acquisition of Echo and the rapid launch of a public token sales platform have signaled a decisive pivot in the exchange’s business strategy, according to industry executives and founders familiar with the shift. The company is looking to benefit from what it perceives as a more lenient regulatory environment under the current U.S. administration. At the same time, it is targeting retail users who have been left out of token launches for a long time.
According to Coinbase executives, the Trump administration has created the most favorable environment for crypto in the US so far. This has been instrumental in reopening the Initial Coin Offering (ICO) route, which had been shut down due to the enforcement wave of 2017-18. They also mentioned the change in the SEC Chair Paul Atkins’ position to a more supportive one regarding disclosures and safe harbors for ICOs and airdrops as the main reason for the break. This indicated that the majority of token sales were considered unregistered securities, had to be re-evaluated.
Scott Keto, the president of CoinList, referred to the SEC no-action letter for DoubleZero as the main reason for the announcement that 2Z token was not a security, which in his opinion, was a regulatory signal without any precedent. He also mentioned that the Clarity Act and other such legislation that is in the pipeline, is giving new life to the confidence of platforms, which in turn makes them willing to engage U.S. retail, thereby the end of the token sales domestically.
Competitive platforms recognize the same regulatory opportunity but are responding differently. Legion intends to provide services to U.S. retail customers, maintaining that new regulatory frameworks should see most tokens being out of the scope of securities laws. Meanwhile, BuidlPad is going to concentrate on non-U.S. users with a highly curated sales model.
Scott Shapiro, trading head at Coinbase, mentioned that the company is building a full-stack pipeline to be the one-stop shop from the earliest fundraising on Echo, public sales on Echo Sonar, to the final distribution on Coinbase — a structure that is very flexible to support projects wherever they are in their lifecycle. Brandon Potts of Framework Ventures and Anirudh Pai of Robot Ventures, the two VCs, saw the move as vertical integration, thus allowing Coinbase not only to capture users at an earlier stage but also to be the direct and seamless on-chain partner for Base’s ecosystem.
Founders emphasized that token launches are still one of the highest-volume moments for exchanges, and because of Coinbase’s historically conservative listing strategy, it has missed out on a major part of the market. Competitors argued that even though Coinbase might get most of the premium deals, there are still opportunities for platforms that provide degenerate-style launches, less strict compliance, or more flexible founder terms, thus allowing the sector of forthcoming token issuances to remain vibrant and diversified.
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