Term Sheet — Thursday, June 7

By June 7, 2018 ICO
Click here to view original web page at fortune.com

Good morning, Term Sheet readers.

U.S. cryptocurrency exchange Coinbase will acquire a firm that owns Keystone Capital Corp., Venovate Marketplace, and Digital Wealth, in a bid to become a fully SEC-regulated broker dealer. Keystone Capital, a Cardiff, Calif.-based financial services firm, is a FINRA-registered broker-dealer, and it has licenses to operate as a registered investment adviser, as well as to run an alternative trading system.

Financial terms weren’t disclosed. Here’s what to know about this deal:

• This is huge for Coinbase because it could expand its business opportunities and allow it to market its services to institutional investors.

• Coinbase is positioning itself to offer both traditional equities and a broader range of blockchain-based securities.

• Coinbase President and COO Asiff Hirji said in a blog post: “Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement, and chain-of-title.”

• Hirji added that the acquisition serves as a step in further legitimizing the burgeoning cryptocurrency space. “We believe this will democratize access to capital markets for companies and investors alike, lowering costs for all participants and bringing additional transparency and inclusion to the ecosystem,” he wrote.

• My colleague Jeff John Roberts reports, “By carrying out the acquisition, Coinbase is poised to enjoy the same regulatory status as Keystone Capital. For this to occur, the regulatory authority FINRA must grant its approval, though a person familiar with the deal told Fortune this is likely to be a formality.”

Most importantly, this matters because SEC Chairman Jay Clayton made it clear yesterday that the agency won’t be bending the rules for cryptocurrency when it comes to defining what is or what isn’t a security. He emphasized that that tokens or digital assets used in that fundraising process are securities.

“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,” Clayton said. “If you want to do any IPO with a token, come see us.”

ATHENAHEALTH CEO OUSTED: Jonathan Bush, Athenahealth’s CEO and co-founder, resigned Wednesday following reports of inappropriate behavior. Bush’s resignation makes him at least the sixth CEO to lose his or her job in the context of an Elliott campaign.

My colleague Jen Wieczner got to know Bush back in 2014 when he was facing another hedge fund manager who was publicly shorting Athenahealth’s stock. “And by getting to know Bush I mean: I played drinking games with a shirtless Bush, witnessed him dress up in costume in front of his board and employees, and swam in a frigid lake with him—all in the name of reporting for my Fortune magazine profile, Is Athenahealth CEO Jonathan Bush in a Bubble,” she writes.

From her story:

In stepping down from the company he founded more than two decades ago, Bush seemed to concede that the renegade elements of his personality that once served his entrepreneurial aims were now a liability in his leadership, saying, “It’s easy for me to see that the very things that made me useful to the company and cause in these past 21 years, are now exactly the things that are in the way.”

This one is worth your time. Read the full story here.

U.S. cryptocurrency exchange Coinbase will acquire a firm that owns Keystone Capital Corp., Venovate Marketplace, and Digital Wealth , in a bid to become a […]

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