Bitcoin Exchange Coinbase Receives New York BitLicense

San Francisco-based bitcoin exchange Coinbase has been granted its New York BitLicense, allowing it to continue doing business in the state.

Jan 17, 2017 at 6:00 p.m. UTC
Updated Sep 11, 2021 at 1:00 p.m. UTC

The New York State Department of Financial Services (NYDFS) has awarded cryptocurrency exchange Coinbase a formal license to do business in the state.

Though Coinbase has been allowed to serve New York customers under a safe-harbor provision while the application process was being conducted, the formal award of the so-called "BitLicense" solidifies the exchange's operating status.

Coming at a time when the exchange has been waging what could be an expensive legal battle with the IRS to protect its customer data, the license is being described as a "validation" of Coinbase’s aim to be compliant with regulatory considerations.

Coinbase CEO Brian Armstrong said in a statement:

"At Coinbase, our first priority is to ensure that we operate the most secure and compliant digital currency exchange in the world. We're thrilled to have obtained the BitLicense and look forward to expanding our business in New York."

The license was granted after a "comprehensive" review of Coinbase’s anti-money laundering, capitalization, consumer protection and cybersecurity policies, according to a statement provided to CoinDesk by the NYDFS.

The company will be subject to ongoing supervision by the regulator.

San Franscico-based Coinbase is one of the most heavily funded startups in the industry, having raised $117m in venture capital.

Adding to history

in June 2015, the BitLicense was designed to provide a framework for companies looking to custody bitcoin and other cryptocurrencies for their customers or trade the cryptocurrency.

However, after an initial 22 applications were sent in, the controversial license proved too expensive for many startups. In fact, this is only the third BitLicense to be awarded to date, with multiple applications have been denied.

In September 2015, Boston-based Circle was granted the first BitLicense, though by December 2016 the company had pivoted away from its bitcoin exchange to focus more on payments.

Last July, San Francisco-based Ripple was awarded the second BitLicense.

In addition to the BitLicense, the NYDFS has granted banking charters to bitcoin startups Gemini Trust Company and itBit Trust Company.

Financial Services Superintendent Vullo concluded in the statement:

"New York is committed to fostering and encouraging the long-term growth of new industries throughout the state while enforcing all necessary safeguards to protect our markets and consumers."

Image via Glassdoor 

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
First Mover Asia: USDC Hasn’t ‘Flippened’ USDT, but Trader Preferences Are Changing; Cryptos Rise Despite Bearishness

A Glassnode analyst suggests the collapse of the UST token has triggered a change in investors' stablecoin preferences; bitcoin holds above $30,000.

A Glassnode analyst suggests the collapse of the UST token has triggered a change in investors' stablecoin preferences; bitcoin holds above $30,000.

2
Musk Sets New Condition for Twitter, Citi Says Terra’s Fallout Unlikely to Hit Wider Financial System

The most valuable crypto stories for Tuesday, May 17, 2022.

The most valuable crypto stories for Tuesday, May 17, 2022.

3
Market Wrap: Cryptos and Stocks Mixed Amid Bearish Sentiment

BTC is stabilizing around $30K while stock market volatility begins to fade.

BTC is stabilizing around $30K while stock market volatility begins to fade.

4
New Data Shows Underground Bitcoin Mining Thriving in China

The U.S. has also expanded its lead in the global hashrate competition.

The U.S. has also expanded its lead in the global hashrate competition.