New York’s department of financial services has approved bitcoin exchange Coinbase’s application for a virtual currency and money transmitters license, making it one of the largest bitcoin companies to gain the department’s approval. Coinbase becomes one of five virtual currency firms granted approval to operate in New York State, according to a department news release.
The New York BitLicense became effective on June 24, 2015, as one of the stricter state laws governing cryptocurrency businesses. Several cryptocurrency businesses – such as LocalBitcoins, BitFinex and Kraken – chose to leave New York due to the regulation.
Coinbase First Opposed The Law
Coinbase was among many bitcoin businesses that initially opposed the BitLicense before it became law. Coinbase said the law fell short of its goal of balancing customer protection and rooting out illegal activity while encouraging innovation. The company encouraged consumers, developers, investors and others to voice their concerns to the department.
Coinbase submitted a BitLicense application in August of 2015.
“Through the creation and promotion of strong state-based regulation, DFS continues New York’s long record of being responsive to technological innovation,” Maria T. Vullo, the financial services superintendent, stated in the release. Vullo further noted the state encourages long-term growth of new industries while enforcing safeguards to protect markets and consumers.
The department noted it examined Coinbase’s anti-money laundering, capitalization, consumer protection, and cyber security policies.
Coinbase ‘Thrilled’ To Have BitLicense
“At Coinbase, our first priority is to ensure that we operate the most secure and compliant digital currency exchange in the world,” Brian Armstrong, Coinbase CEO and co-founder, stated in the press release. “We’re thrilled to have obtained the BitLicense and look forward to expanding our business in New York.”
The department has approved five firms for virtual currency licenses or charters, while denying applications that did not meet its standards.
In addition to Coinbase, the department noted in its release that it has granted licenses to Circle Internet Financial and XRP II, and charters to itBit Trust Company and Gemini Trust Company. XRP is the native digital asset of the Ripple Consensus Ledger, a platform used by financial institutions including banks as well as companies. CCN reported in June of 2016 that the department approved Ripple Labs’ BitLicense application.
The department has denied applications from Snapcard Inc., OKLink PTE. LTD., ChangeCoin Inc. and Ovo Cosmico Inc.
New York Opposes National Fintech Charter
The department noted in its press release that it recently submitted a letter opposing the Office of the Currency proposal to create a national bank charter for fintech companies. The Office of the Currency is an independent bureau of the U.S. Department of the Treasury that charters, regulates and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks.
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