NEW YORK (Reuters) - Cryptocurrency exchange Coinbase has acquired Paradex, a platform that enables users to trade virtual coins directly with each other, the San Francisco-based company said on Wednesday.
Coinbase plans to make some enhancements to the technology and launch Paradex’s services to customers outside of the United States, enabling them to trade “hundreds of tokens,” it said.
The financial terms of the deal were not disclosed.
Paradex, which has 10 employees, is considered a decentralized exchange because it does not maintain custody of the tokens on behalf of its users but allows them to trade them through digital wallets.
The move will significantly expand the types of cryptocurrencies that customers will be able to access through Coinbase, which has traditionally been more conservative than competitors in listing new types of coins. The exchange offers trading in four of the largest coins: bitcoin, ether, litecoin and bitcoin cash.
The number of cryptocurrencies has surged to more than 1,600 over the past year in part fuelled by a boom in initial coin offerings (ICO), online fundraisers where new coins are issued to contributors.
Some U.S. exchanges have been more cautious about listing ICO tokens because of concerns that they might be considered unregistered securities and could require platforms that list them to be licensed by regulators.
In March the U.S. Securities and Exchange Commission warned investors that platforms offering trading of digital assets that are securities and operate as an “exchange” must register with regulators.
Coinbase will “eventually” offer access to Paradex services to its U.S. customers after it implements “changes for compliance purposes,” it said.
The company also said on Wednesday that it is overhauling its trading platform for professional investors known as GDAX. Customers of GDAX will be rolled over to the revamped service called Coinbase Pro at the end of June, it said.
Coinbase announced last week that it was revamping its trading technology and creating a new suite of services to attract more institutional investors, including hedge funds and high-frequency trading firms.
Reporting by Anna Irrera; Editing by Cynthia Osterman