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Coinbase Granted BitLicense in New York

Bitcoin exchange Coinbase has been granted a BitLicense in New York, granting the company the legal authority to trade within New York state.

The company, which provides a platform for bitcoin and cryptocurrency exchanges, received confirmation of the license from the New York State Department of Financial Services, a significant step toward delivering regulatory compliance.

The announcement comes at a time where Coinbase is fending off legal wranglings from the IRS concerning the disclosure of customer information from the network.

As Coinbase seeks to defend the privacy of its users in court, the new license has been described in some quarters as a “validation” of the Coinbase concept, and of their efforts to ensure compliance.

Coinbase is one of the most heavily backed startups in the Bitcoin space, with some $117 million in funding behind the company and its growth efforts. The news has been welcomed by industry analysts more broadly, as a sign that governments and regulators could now be more open to creating a blockchain-specific compliance framework.

Brian Armstrong, CEO of Coinbase, said that the license represented a significant step forward for the company, as it continues to develop its business in New York state.

"At Coinbase, our first priority is to ensure that we operate the most secure and compliant digital currency exchange in the world,” Armstrong said. “We're thrilled to have obtained the BitLicense and look forward to expanding our business in New York."

The third license of its kind to ever be granted, the New York BitLicense has been seen as controversial, with numerous initial applicants rejected and a significant cost attached to securing the license.

Along with other licensees Circle and Ripple, Coinbase is now able to explore their exchange platform under the watch of regulators, ensuring formal legitimacy in their efforts to develop a mainstream global Bitcoin exchange.

Discussing the award of the license, a spokesperson for the New York State Department of Financial Services said that the state was committed to helping new businesses and industries emerge, while delivering a regulatory environment that is fit for purpose.

"New York is committed to fostering and encouraging the long-term growth of new industries throughout the state while enforcing all necessary safeguards to protect our markets and consumers."