Coinbase has submitted an application for a BitLicense in New York State, making it one of the leading bitcoin businesses to seek the necessary regulatory approval. Coinbase advised CCN of its action in the wake of plans by other cryptocurrency businesses – such as LocalBitcoins,…
“We can confirm that Coinbase has submitted a BitLicense application,” a Coinbase spokesman told CCN. “The process was a significant undertaking, but we’re fortunate to have the internal resources and competent team to get this done.”
While much attention has fallen on New York State, Coinbase has pursued a larger multi-state licensing strategy for nearly two years, said the spokesperson, who did not wish to be named. He said the strategy has incurred “significant expense.”
We look forward to working with the DFS (New York Department of Financial Services), as we have with other states, to get fully licensed and continue to serve consumers, merchants and developers across the U.S., the spokesman said.
The BitLicense became effective on June 24, 2015 and required businesses engaged in “Virtual Currency Business Activity” to apply for a license by Aug. 8, 2015.
Coinbase was among many bitcoin businesses that 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 DFS.
The BitLicense regulations overlapped money transmitter licenses, Coinbase noted in its response to the BitLicense during the law’s comment period. Coinbase said the Financial Crimes Enforcement Network already placed a strong anti-money laundering policy in place with its bitcoin guidance.
By requiring the collection of information not supported by the bitcoin protocol, the BitLicense would force licensees to operate proprietary payment networks, thereby eliminating bitcoin’s open protocol feature, Coinbase further argued.
Coinbase said the regulation should only target companies that hold customers’ bitcoin.
In late January, Coinbase said it had regulatory approval in several states. Some reports said Coinbase claimed it had approval in New York, but The New York Times reported that Coinbase did not have the regulatory approval. Coinbase then said was working on this approval.
The BitLicense has pushed cryptocurrency businesses into two camps: players and non-players. In addition to BitFinex and Kraken, Eobot, a cryptocurrency cloud mining company, and ShapeShift, a Switzerland-based cryptocurrency exchange, ended service to New York residents. In addition, the mining pool BTC Guild announced plans to shut down its services, citing concerns about the New York BitLicense.
CCN reported earlier this week that Bitstamp has also applied for a BitLicense.
Featured image from Shutterstock.
Last modified: May 21, 2020 11:02 AM UTC