Coinbase Receives Approval to Offer Crypto Custody Services in New York

Coinbase, a digital currency exchange headquartered in San Francisco, has had its application approved for its wholly-owned subsidiary, Coinbase Global, Inc., to operate as a limited purpose trust company.

This Tuesday, Financial Services Superintendent Maria Vullo announced that the New York State Department of Financial Services (DFS) had approved the above application, as well as the exchange’s request to offer secure custody services for six of the largest virtual currencies through its subsidiary.

These Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term are of course Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, XRP and Litecoin. The approvals granted yesterday add to the firm’s Money Transmitter and Virtual Currency licenses, which the DFS granted back in January of 2017.

Speaking on the approvals, Asiff Hirji, President and COO of Coinbase, said: “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.”

Coinbase Custody

Back in July, Coinbase launched its custody services, dubbed 'Coinbase Custody'. These services are aimed at institutional customers and utilise a number of security measures. This included 'on-chain segregation of crypto assets', 'offline, multi-sig and geographically distributed transaction protection', and 'robust Cold Storage Cold Storage Cold storage is a computer system or mode of operation that is designed for the retention of inactive data, in this case private keys for cryptocurrencies. This helps put up resilient barriers against theft by hackers and malware, and is often a necessary security protocol especially dealing with large amounts of Bitcoin.In order to “own” a cryptocurrency, one must be in control of a cryptocurrency’s private keys. As such, private keys are long strings of random characters that can be used to se Cold storage is a computer system or mode of operation that is designed for the retention of inactive data, in this case private keys for cryptocurrencies. This helps put up resilient barriers against theft by hackers and malware, and is often a necessary security protocol especially dealing with large amounts of Bitcoin.In order to “own” a cryptocurrency, one must be in control of a cryptocurrency’s private keys. As such, private keys are long strings of random characters that can be used to se Read this Term auditing and reporting'.

Superintendent Vullo added: “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.”