In the wake of the FTX implosion and the subsequent market crash, the cryptocurrency sector has come under heightened regulatory scrutiny.
As a result, Coinbase and IEX are reportedly in talks to address the underlying problem and create a regulated crypto trading platform.
The publicly traded crypto exchange and stock exchange leadership have entered into discussions to establish a federally approved digital asset marketplace, according to sources with direct knowledge of the matter, Fox Business reported on February 21.
IEX Chairman Brad Katsuyama has previously met with officials from the United States Securities and Exchange Commission (SEC), including its boss Gary Gensler, to discuss the foundation of the first crypto exchange that would have his unambiguous approval.
The initial plan included partnering with FTX founder Sam Bankman-Fried (SBF), but IEX has had to find a new partner as SBF faces a federal indictment alleging widespread fraud.
The crypto industry is facing increasing regulatory pressure. Kraken recently agreed to shut down its staking services in the U.S. and pay a $30 million fine to settle charges with the SEC, while Paxos was forced to stop issuing the dollar-pegged Binance token BUSD and is now facing accusations by the SEC over selling the stablecoin it considers a security.
Some industry experts see these moves as a concerted effort to marginalize the industry and cut off its connectivity to the banking system.