Coinbase Gets Approval From New York State Regulators to Offer Custody Service for XRP and Other Cryptos
On Tuesday, October 23, Coinbase’s wholly owned subsidiary Coinbase Custody got an official approval from the New York State Department of Financial Services (DFS), to offer cryptocurrency custody services for digital assets.
In the official announcement, Financial Services Superintendent Maria T. Hullo said that Coinbase Custody Trust Company LLC can operate as “a limited purpose trust company.” The Coinbase Trust will provide custodial solutions for top-six cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, XRP and Litecoin.
As such Coinbase already owns two DFS licenses - Virtual Currency and Money Transmitter - which gives it the permission to transfer, trade, receive, and store different digital assets. However, it is quite surprising to see XRP considering the fact that the cryptocurrency is yet to be listed on the Coinbase exchange.
Superintendent Maria T. Hullo 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.”
Back in July 2018, Coinbase announced the launch of ‘Coinbase Custody’ solution specifically targeted at institutional players. With the cryptocurrency market plagued with multiple exchange hacks, safe and secure custodial solutions are of utmost importance for institutional entry.
During the time of launch, the company said: “Coinbase Custody is proud to offer a service that couples Coinbase’s cryptocurrency security excellence with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer.”
The Coinbase Custody platform incorporates a range of security measures like “robust cold storage auditing and reporting”, “offline, multi-sig and geographically distributed transaction protection” and “on-chain segregation of crypto assets”.
Coinbase President and COO, Asiff Hirji lauded NYDFS’s decision saying that it “has proven itself to be a strong advocate in its support for the responsible growth of the cryptocurrency industry.”
Hirji further added: “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. We applaud the leadership Superintendent Vullo has shown to guide the responsible growth of the cryptocurrency ecosystem and look forward to working with their offices in the future.”