Coinbase Wins Approval for Crypto Custody Services in New York

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Leading crypto wallet and exchange service Coinbase has been granted full approval to offer cryptocurrency custody services in New York, in a landmark development for the firm.

The New York Department of Financial Services this week confirmed that Coinbase had been granted approval, which will see a new entity, Coinbase Custody Trust Company LLC, set up to handle crypto custody services within the state.

The new service will provide custody for cryptocurrency holdings in a range of denominations, including bitcoin, bitcoin cash, ether, litecoin and XRP.

The decision to grant Coinbase approval means the exchange is now able to accept crypto custody inquiries from investors, and crucially from institutional investors, to safeguard cryptocurrency holdings.

Regarded as an essential service for enticing regulated investors to take position in crypto markets, the company’s new status as a licensed custodian will present an attractive offer to fund managers and investors.

Coinbase president and chief operating officer Asiff Hirji welcomed the move and described the New York Department of Financial Services as “a strong advocate” for the emerging cryptocurrency sector.

“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.”

Crypto custody services are designed to securely store and protect cryptocurrency, providing safeguards that are essential to investor confidence and peace of mind.

Particularly for regulated or licensed institutions like banks, these services also play an important role in compliance, enabling these investors to take positions in crypto markets.

The approval sees Coinbase join several other similar services to have received regulatory approval in recent months, including BitGo, Prime Trust and Northern Trust, reflecting growing demand for custody, as well as an increasing willingness from firms to embrace regulation in and around the cryptocurrency sector.

It comes at a busy time for Coinbase and industry regulators, with several other licenses currently pending, including a broker dealer license and a registered investment advisor license courtesy of the Securities and Exchange Commission and the Financial Industry Regulatory Authority, respectively.