- Coinbase met the state’s strictest standards for confidentiality, security and storage
- Approval happened on the same day the exchange added the USDC Stablecoin
- Coinbase Trust Company is the eleventh organization to get DFS approval
Leading cryptocurrency exchange Coinbase has been granted approval to act as cryptocurrency custody. The approval enables Coinbase Custody Trust Company to operate a standalone independently capitalized business after meeting the state’s strictest standards for capitalization, anti-money laundering procedures, confidentiality, security, and storage.
Per the press release, New York’s Department of Financial Services (DFS) granted Coinbase Custody full approval to provide custody services for Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, Litecoin and XRP. The development was announced by the Financial Services Superintendent Maria T Vullo who stated:
“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. 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.”
XRP is the only digital asset from the list not currently available for trading across Coinbase’s various platforms. The recognition and backing by the New York state comes on the heels of other crypto custody platforms such as BitGo receiving recognition by government organizations. The regulatory approval by DFS happened on the same day that Coinbase added the USDC dollar backed-Stablecoin to its website and wallet.
Commenting about the development, Chief Operating Officer Asiff Hirji praised the New York Department of Financial Services for remaining a beacon of light among governing bodies for a long time. He further remarked it was satisfying to realize government bodies were supporting the responsible growth of the cryptocurrency industry. Hirji stated:
“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.”
Coinbase exchange unveiled its custody service ‘Coinbase Custody’ in July to focus on institutional investors and is optimized to store huge amounts of cryptocurrencies. According to the company, the product uses several security measures such as “on-chain segregation of crypto assets,” “offline, multi-sig and geographical distributed transaction protection” including “robust cold storage auditing and reporting.”
Coinbase announced plans to add 40 new assets to its custodian service last August “for storage only” since it is not considering them for trading. The latest approval of Coinbase Trust Company makes it the eleventh organization to be approved by DFS.