Business

Dennis Wafula

Coinbase granted license to offer crypto custody services in New York

Coinbase has been awarded a license to operate as an independent qualified custodian for cryptocurrencies under New York State Banking Law.

On Tuesday, the cryptocurrency exchange announced that the New York Department of Financial Services (NYDFS) has authorized its subsidiary, the Coinbase Custody Trust Company LLC, to offer custody services for Bitcoin Cash, along with other cryptos like ETH, BTC, ETC, XRP, and LTC.

Coinbase Custody, launched in July, will operate as an independent business to Coinbase Inc., offering institutional-grade services “for storing large amounts of cryptocurrency in a highly secure way.” Coinbase Custody products are said to utilize a range of security measures, which include on-chain segregation of cryptocurrency assets, robust cold storage auditing and reporting, offline multi-sig, and geographically distributed transaction protection.

Coinbase holds the Money Transmitter and Virtual Currency licenses from the NYDFS since January 2017. According to the crypto company, the new license will allow the company to store more crypto asset while adding new features on its platform.

Like other businesses, Coinbase Custody will be held to the same regulatory compliance and financial requirements and will have to adhere to strict banking standards like anti-money laundering procedures, confidentiality, safety, and storage.

In a statement, Coinbase President and COO Asiff Hirji said the New York State Limited Purpose Trust charter, which enables Coinbase Custody to act as a qualified custodian for crypto assets, builds on the company’s “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 Custody is an institutional-grade service optimized for storing large amounts of cryptocurrency in a highly secure way. Coinbase Custody also uses systems from SEC-registered broker-dealer and FINRA-member Electronic Transaction Clearing (ETC). In August, Coinbase announced plans to add 40 new assets to its custodian service. The crypto assets in question, however, may be added “for storage only,” as Coinbase is not currently considering the assets for trading.

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