New York Regulator Approves Coinbase’s Custody Services for Six Cryptocurrencies
The New York State Department of Financial Services has licensed a subsidiary of Coinbase to operate as an independent qualified custodian. The regulator has also approved Coinbase’s custody services for six major cryptocurrencies.
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Coinbase Custody Licensed
The New York State Department of Financial Services (NYDFS) announced on Tuesday that it “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.”
Sam Mcingvale, Product Lead at Coinbase Custody, clarified that the subsidiary “has obtained a license under New York state banking law to operate as an independent qualified custodian.”
The regulator added:
NYDFS 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.
Established in 2012, Coinbase now has more than 300 employees and 25 million users, according to its website. The company says it has traded over $150 billion in digital assets and claims to store over $20 billion of crypto assets on behalf of its customers.
The NYDFS granted Coinbase Inc. “money transmitter and virtual currency licenses” in January last year, allowing the firm to offer services for buying, selling, sending, receiving, and storing cryptocurrencies.
About Coinbase Custody
Officially launched on July 2, Coinbase Custody aims to provide solutions for storing large amounts of cryptocurrency. Its customers include institutions, hedge funds, initial coin offering issuers, and cryptocurrency exchanges, its website details, noting:
Coinbase Custody Trust Company will operate as a standalone, independently-capitalized business to Coinbase Inc. and will be held to the same compliance, security and capital requirements as traditional fiduciary custodial businesses.
On Aug. 3, Mcingvale revealed that “Coinbase Custody is exploring a range of new assets.” The company subsequently posted on its website, “We’re hard at work to add support for all ERC20 tokens.”
The minimum balance for the service is $1 million. In addition to custody, the service also includes segregated cold storage, insurance, and audited statements.
Coinbase Custody leverages the systems of its partner, Electronic Transaction Clearing, a broker-dealer registered with the U.S. Securities and Exchange Commission. Electronic Transaction Clearing offers custody, clearing, execution, and settlement services to institutional clients such as broker-dealers, routing firms, trading firms, and hedge funds.
On Tuesday, Coinbase also announced support for USDC, a stablecoin it claims to be “fully collateralized by US dollars and supported by Coinbase and Circle.”
What do you think of Coinbase’s custody services? Let us know in the comments section below.
Images courtesy of Shutterstock, NYDFS, and Coinbase.
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