Coinbase gets ‘Bitlicence’ to operate in New York State

Coinbase became the latest cryptocurrency exchange company to receive a licence that allows it to operate in the state of New York.

The licence, dubbed ‘Bitlicence’, is given out by the New York Department of Financial Services was designed to introduce a framework to ensure companies hold bitcoin and other cryptocurrencies in a secure manner that protects its customers and their finances.

Coinbase received its licence after a “comprehensive review” of the company’s applications, including anti-money laundering, capitalization, consumer protection, and cyber security policies.

Brian Armstrong, Coinbase CEO and co-founder said, “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.”

“Through the creation and promotion of strong state-based regulation, DFS continues New York’s long record of being responsive to technological innovation,” said Financial Services Superintendent Vullo.

The granting of the licence comes at an interesting time for the cryptocurrency company. In the same week as the licence, the San-Francisco-based company has criticised the IRS for issuing a subpoena requiring the company to provide years of customer data.

In his response to the subpoena, Armstrong stressed the importance of compliance, saying it is “key”.

“We’ve invested heavily in compliance since the inception of the company, and today about 20% of the people in our 130 person company work on compliance in some way,” he stated.

The newly-granted Bitlicence is therefore being presented by the company as “validation”, proof of its commitment to regulation. In a statement, the company said:

“The Bitlicense, which authorizes Coinbase’s continuing virtual currency business operations in the state of New York, is an important validation of our highest priority: to operate the most secure and compliant digital currency exchange in the world.”

 

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