Cryptocurrency exchange giant Coinbase has finally reopened its services in Wyoming, a move that comes after the state successfully passed a handful of bills designed to create a favorable climate for the blockchain industry.
The San Francisco-based Coinbase announced in a blog post that it has renewed its state-level money transmitter license, enabling it to resume services in Wyoming after locking investors out of their accounts more than three years ago.
“Coinbase welcomed the opportunity to work with Wyoming House of Representatives Majority Floor Leader David Miller, State Senator Eli Bebout, members of the Blockchain Task Force, and their colleagues to find a solution that allows cryptocurrency custodians and exchanges to reestablish operations,” the company said in a statement attributed to Mike Lempres, the firm’s chief legal and compliance officer.
The company had abruptly shuttered its services in Wyoming in June 2015 after state regulators informed the company that its Money Transmitter Act required them to “double reserve” customer assets by holding fiat currency reserves equivalent to the value of cryptoassets entrusted to the firm’s custody.
“Although Coinbase securely maintains 100% of all customer funds, it is impractical, costly, and inefficient for us to establish a redundant reserve of fiat currency in equivalent value,” the company said at the time.
Coinbase had yanked its services from the state so quickly that investors did not have time to withdraw either their fiat or cryptocurrency funds from the platform, and those funds remained in limbo even after Wyoming passed a series of bills earlier this year to make the state more accommodating to cryptocurrency and blockchain startups.
One of these bills, HB-19, exempted cryptocurrency companies from the onerous double reserve requirement of the Money Transmitter Act, yet the months continued to drag on without Coinbase restoring service in the Cowboy State.
Now though, the platform has returned, though it’s unclear whether investors will feel as comfortable placing assets in the company’s custody as they once did.
Featured Image from Shutterstock
Last modified: May 20, 2020 6:09 PM UTC