California Regulator: Coinbase Exchange ‘Not Regulated or Licensed’

Stan Higgins
Jan 27, 2015 at 18:57 UTC
Updated Jan 28, 2015 at 16:54 UTC

California Department of Business OversightThe California Department of Business Oversight (DBO) has released a statement denying that Coinbase’s new exchange is licensed to operate in the state under existing money transmission laws.

In a press release, the state’s financial services and money transmitters regulator called unnamed press reports that have stated that Coinbase had received regulatory approval to operate its exchange in California mistaken.

In its statement, the agency said it was seeking to “correct erroneous reports that Coinbase Exchange has received regulatory approval from the State”.

DBO Commissioner Jan Lynn Owen said that, at this time, Coinbase’s new exchange is not licensed in the state of California, explaining:

“The California Department of Business Oversight has not decided whether to regulate virtual currency transactions, or the businesses that arrange such transactions, under the state’s Money Transmission Act. California consumers should be aware Coinbase Exchange is not regulated or licensed by the State.”

California in ‘grey zone’

When reached for comment, a Coinbase representative said that the company had received licenses in 14 US states, as well as indications from eight other states including Massachusetts where such licenses were not required.

The Coinbase representative cited New York and California as states that are “working on their own bitcoin regulations”, saying that they exist in a regulatory “grey zone” regarding bitcoin.

The spokesperson added that Coinbase is in contact with applicable regulatory agencies about the exchange.

At press time, Coinbase’s website lists California as a state where its exchange product is currently supported.

Tanaya Macheel contributed additional reporting.