Coinbase’s Bold Token Listing Shake-Up: A Game-Changer or a Regulatory Gamble?

The crypto industry is buzzing with optimism, but is it justified?

With a new chair at the helm of the U.S. Securities and Exchange Commission (SEC), crypto moguls are hopeful that Paul Atkins will usher in a more favorable regulatory era. The latest move by Coinbase seems to capitalize on this sentiment—but could it be a double-edged sword?

Coinbase, one of the world’s largest cryptocurrency exchanges, is set to overhaul its token listing process this month. Historically, the exchange imposed high barriers for new token approvals, ensuring a level of due diligence that made listings a coveted achievement. Now, according to CEO Brian Armstrong, that’s all about to change.

Instead of manually scrutinizing each token, Coinbase may take a crowdsourced approach—allowing users to flag scams while letting the market determine which projects are worth listing. Imagine a “community notes” system for crypto.

“Evaluating each one by one is no longer feasible,” Armstrong stated on X, pointing out the exponential growth of tokens. “Regulators need to understand that applying for approval for each one is totally infeasible at this point as well (they can’t do 1M a week).”

This shift aligns with a broader trend: a flood of new crypto investment products. The number of spot exchange-traded crypto funds has surged, and issuers are getting bolder, filing applications for assets like Cardano, Hedera, Litecoin, Solana, and even XRP. Some firms, like Tuttle Capital, have even submitted leveraged ETF proposals for memecoins such as TRUMP, MELANIA, and BONK—something that would have been unthinkable under former SEC Chair Gary Gensler.

But is the industry’s optimism blinding it to reality? BitGalactic analysts caution that while leadership changes may bring fresh perspectives, the SEC remains a regulatory body with a mandate to oversee financial markets—not a cheerleader for crypto innovation.

“A leadership change is definitely beneficial for crypto, but the SEC is still a regulator,” Bryan Armour, director of passive strategies research at Morningstar, told the Financial Times.

The question remains: Is Coinbase’s shift a necessary evolution in a rapidly expanding market, or is it a risky bet on regulatory leniency? Only time will tell whether this strategy will empower the crypto community or invite regulatory backlash.