Financial Services Superintendent Maria Vullo has announced the New York State Department of Financial Services (DFS) has approved the application of Coinbase Custody Trust Company LLC, a wholly-owned subsidiary of Coinbase Global, Inc., to operate as a limited purpose trust company.
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“New York continues to be a leader in creating, fostering, and responsibly regulating a financial services marketplace that promotes innovation, safeguards the industry and protects consumers through strong supervision,” said Superintendent Vullo.
“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.”
Coinbase Inc. has held Money Transmitter and Virtual Currency licenses from DFS since January 2017. DFS has also approved Coinbase Trust to offer secure custody services for six of the largest virtual currencies: Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, XRP and Litecoin.
DFS has rapidly responded to innovations by licensing technology based money transmitters under New York’s money transmitter law; online lenders under New York’s banking law; and virtual currency exchanges under New York’s financial services law.
To date, DFS has approved eleven charters or licenses for companies in the virtual currency marketplace. DFS issued a virtual currency and money transmitter license to Coinbase, Inc. in January 2017 to offer services for buying, selling, sending, receiving, and storing virtual currency.
Today, DFS authorized Coinbase Custody Trust to offer narrow services to operate as a custodian for virtual currencies, including Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, XRP and Litecoin.
“Since 2014, the New York Department of Financial Services has proven itself to be a strong advocate in its support for the responsible growth of the cryptocurrency industry. The New York State Limited Purpose Trust charter, which now enables Coinbase Custody to act as a Qualified Custodian for crypto assets, builds on our unparalleled success as a crypto custodian while holding the company to the same exacting fiduciary standards and oversight of other, mature financial institutions operating in New York. We applaud the leadership Superintendent Vullo has shown to guide the responsible growth of the cryptocurrency ecosystem and look forward to working with their offices in the future,” Asiff Hirji, President and COO of Coinbase.
Additional information regarding DFS’s regulation of New York’s virtual currency marketplace can be found here.