The New York Department of Financial Services approved the virtual currency and money transmitter license for Coinbase after a thorough review of its applications.
Bitcoin exchange Coinbase is proud to unveil that it has got the virtual currency and money transmitter license from the New York Department of Financial Services. Thus, the exchange becomes one of the largest bitcoin companies to gain the department’s approval.
The official announcement was made by Financial Services Superintendent Maria T. Vullo, who said the agency was continuing “New York’s long record of being responsive to technological innovation.”
Vullo underlined that the state is interested in long-term growth of new industries while enforcing safeguards to protect markets and consumers.
The DFS reports that it issued a license after a thorough review of Coinbase’s applications, including the company’s anti-money laundering, capitalization, consumer protection, and cyber security policies.
Coinbase, the world’s largest bitcoin company, offers services for buying, selling, sending, receiving, and storing the cryptocurrency. The services are now available in 32 countries. Coinbase has two trading platforms, one for retail investors and one for institutions.
“At Coinbase, our first priority is to ensure that we operate the most secure and compliant digital currency exchange in the world,” said Brian Armstrong, Coinbase chief executive officer and co-founder.
Initially, Coinbase was one of those bitcoin companies that had opposed the BitLicense before it became law. Coinbase claimed that the law failed to balance between customer protection and elimination of illegal activity while encouraging innovation at the same time. The company appealed to consumers, developers, investors and others to voice their concerns to the department.
However, in August 2015 Coinbase submitted a BitLicense application.
Coinbase is not the only company that got a license from the DFS. The Department also granted money transmitter licenses to Ripple and Circle Internet Financial and trust charters to Gemini Trust Company, founded by the Winklevoss brothers, as well as itBit Trust Company.
Currently, Coinbase continues its struggle to protect customer information as earlier the court allowed the Internal Revenue Services (IRS) to require the records of every user who conducted transactions in bitcoin between 2014 and 2015 from Coinbase. Let us remind the course of events.
The initial petition of the IRS was based on general statements that taxpayers might have used bitcoin to evade taxes. The IRS also backed its requirement by the fact of two cases of tax evasion involving Coinbase and the anonymous nature of bitcoin. The wrongdoing on the part of Coinbase wasn’t detected.
The dissatisfaction of Coinbase customers resulted in the case filed by Los Angeles attorney Jeffrey K. Berns, the Managing Partner of Berns Weiss LLP, who used the exchange company to buy and sell bitcoins.
“There is no legitimate reason to seek these records,” states Berns. “Individuals with no taxable events shouldn’t be subject to a complete investigation because the IRS doesn’t understand a developing technology.”
The IRS responded that its aim is to get access to the information “revealing the identity of certain unknown taxpayers”.
We will keep you informed about any further developments on the issue.