Coinbase Custody Obtains License From The New York Department of Financial Services
Coinbase has recently affirmed on its blog that its custodial service, Coinbase Custody, was successful in getting a license under the New York State Banking Law and that it would now operate as an independent Qualified Custodian. Even though Coinbase has held a Money Transmitter and Virtual Currency license since 2017 with DFS, this now means that the company has legal permission to act as a Limited Purpose Trust Company with the backing of the New York Department of Financial Services.
The license allows Coinbase to offer custody services for the top six cryptocurrencies: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), and XRP.
I think its safe to say the Twitter sphere will be asking.. when xrp?
This product for institutional investors will be used to store large amounts of crypto in more secure ways. This is, according to the blog post, more than just a license, it is an important piece of regulatory clarity that will allow the company to be considerably more compliant with the local legislation and to add more features to the system.
According to the reports, Coinbase Custody Trust Company will be a standalone business that will operate in a separate way from Coinbase Inc., which will continue its work normally. However, both companies will use the same compliance standards and have high-security standards.
Financial Services Superintendent Maria T. Vullo said
“Today’s approval further demonstrates that the state regulatory system is the best arena in which to responsibly supervise the growing fintech industry within a sound and compliant framework.”
This license means that the clients of Coinbase Custody will now know that they are protected with anti-money laundering procedures, confidentiality, security and storage standards that are accepted by a very important regulator in the New York state. With the approval of this license, Coinbase Custody has become the 11th company in the virtual currency marketplace. Gemini and Paxos hold two of those licenses.
Cryptos are maturing more and more into something more “traditional” as hedge funds enter the market so Coinbase is committed to upgrading its services so that the investors feel protected when using the services of the company.