Coinbase Pivots to ‘Everything App’ as SEC Quietly Unlocks Custody Gates

The Pivot: Zero-Sum Game Against TradFi

Coinbase isn’t just an exchange anymore; as of yesterday’s System Update, it is officially a bank, a broker, and a betting house. The headline feature, stock trading via Coinbase Capital Markets, signals a direct offensive against Robinhood, but the real infrastructure shift is the integration of prediction markets powered by Kalshi. This effectively merges the “degen economy” with regulated futures, allowing users to bet on political and economic outcomes directly alongside their spot BTC holdings.

Brian Armstrong’s “new era” pitch relies on capturing the entire financial stack. By bundling AI-powered investment agents and custom-branded stablecoins, Coinbase is betting that users want a single interface for all risk assets, not just digital ones. The market reaction was tepid, with COIN slipping 3% to trade near $295, while Bitcoin consolidated around $87,000.

The Institutional Green Light

The timing of this pivot is surgically precise. Hours before the Coinbase keynote, the SEC’s Division of Trading and Markets released a critical statement on Rule 15c3-3. The guidance effectively allows broker-dealers to deem they have “physical possession” of crypto assets if they control the private keys, removing a multi-year regulatory deadlock.

This is the “institutional bridge” the industry has waited for. By clarifying that holding keys equals physical possession (under strict compliance controls), the SEC has quietly greenlit the very hybrid model Coinbase is launching. It’s no longer a gray area; it’s a compliance checklist.

Security Watch: The $3.7B Time Bomb

While the corporate suits celebrate, the on-chain reality remains hostile. SlowMist’s Cosine flagged a critical vulnerability today affecting two unnamed trading platforms, one managing $3.7 billion in daily volume. The firm reports that their disclosure attempts have been ignored. Until these entities patch or publicize, liquidity on mid-tier exchanges carries an undisclosed premium of catastrophic risk.

“Attempts to contact the platforms have been unsuccessful… one platform has a 24-hour trading volume of $3.7 billion.” . Cosine, SlowMist