The New York State Department of Financial Services (DFS) recently approved Coinbase Custody as a limited purpose trust company. This approval allows the Coinbase subsidiary to offer cryptocurrency custodial services in the state.
New York DFS Approval
In an official press release published on Tuesday (October 23, 2018), the New York DFS announced the approval. Based on this development, Coinbase can now offer custodial services for Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, and Ethereum Classic.
Commenting on the approval, the Coinbase COO, Asiff Hirji, commended the New York DFS for its support and advocacy for the growth of the cryptocurrency industry in the state. The Coinbase COO also lauded the efforts of Financial Services Superintendent, Maria T. Vullo, especially in the area of actively trying to advance the growth of the local virtual currency ecosystem. Speaking further, Hirji said:
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.
The custody approval also joins the Money Transmitter and Virtual Currency License obtained by Coinbase from the DFS in 2017. Speaking on this latest Coinbase license, Vullo said:
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.
Coinbase Cryptocurrency Custody
Coinbase launched its custody suite for institutional investors back in July 2018. At the time the platform was to combine Coinbase’s cryptocurrency cold storage with broker-dealer capabilities, client coverage program, and the now-canceled Coinbase Index Fund.
According to Coinbase, the custody platform will offer robust cryptocurrency storage using a variety of security protocols. In August 2018, Live Bitcoin News reported that Coinbase was mulling the addition of 37 new cryptocurrencies to its Custody platform.
The news of the Coinbase Custody approval by the New York DFS is yet another massive step towards attracting more institutional investors into the industry. Recently, Brian Kelly of BKCM LLC described custody as a “big hurdle” that needed to be addressed to get more big-money players interested in cryptocurrency assets.
Will the news of the Coinbase Custody approval galvanize more institutional interest in the cryptocurrency market? Keep the conversation going in the comment section below.
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