Coinbase said Thursday that it has partnered with BlackRock to give the world’s biggest asset manager’s clients access to bitcoin and other cryptocurrencies.
The news sent Coinbase shares rallying more than 15% as a partnership with a major Wall Street institution eased investor worries about heightened regulatory scrutiny of the crypto marketplace. Coinbase will provide clients of BlackRock’s Aladdin software “direct access to crypto, starting with bitcoin,” Coinbase executives Brett Tejpaul and Greg Tusar said in a blog post.
The marketplace will offer access to crypto assets through Coinbase Prime, which will provide “crypto trading, custody, prime brokerage, and reporting capabilities to Aladdin’s Institutional client base who are also clients of Coinbase,” the executives said.
It’s a big win for Coinbase at a time when the crypto powerhouse is facing growing pressure from the SEC. The regulator recently charged a former Coinbase product manager with insider trading arguing that many of the assets offered on the platform should be regulated as securities. The SEC is also reportedly probing the crypto marketplace for possible violations of securities laws.
Coinbase has rejected the SEC’s claims and accused the federal agency of “regulation by enforcement.”
The company’s stock had recently slipped as Coinbase reeled from the market downturn and Wall Street's concerns about the growing regulatory challenges facing the platform and the crypto industry more broadly.
The BlackRock announcement appears to have restored investor confidence in the company, which went public last year. The partnership also underscores the growing interest of institutional investors in digital assets despite the dramatic crash of the crypto market, which has shed about $2 trillion since late last year.
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, said in a statement.
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