Coinbase Not Overseen by California's Regulatory Body

In a surprising turn of events, Coinbase, the leading Bitcoin exchange in the United States, has found itself in a regulatory grey zone in California. The California Department of Business Oversight (DBO), now known as the California Department of Financial Protection and Innovation, has yet to grant Coinbase a license to operate in the state under the Money Transmission Act.

This lack of licensing has raised eyebrows in the Bitcoin industry. Jan Lynn Owen, Commissioner for the DBO, made a statement regarding the lack of regulation of virtual currency transactions in California. The regulatory status of these transactions remains unclear for businesses like Coinbase.

Coinbase, in its defence, has stated that it will contact the necessary regulatory departments and obtain a license if there is any clarification regarding the regulation of virtual currency transactions in California. The company currently does not hold a specific license from the California Department of Financial Protection and Innovation, but California passed the Digital Financial Assets Law (DFAL, AB-2269) empowering the department to grant licenses to crypto exchanges to operate in the state.

The news about Coinbase's license issue has potentially affected the trust in Bitcoin. Following the announcement, the price of Bitcoin increased before falling sharply, indicating a temporary boost in confidence that didn't last for more than a day. The price drop seems to be a setback in the Bitcoin industry, considered the worst news in the past year given the earlier context.

Coindesk.com reached out to Coinbase for clarification about the regulatory status of virtual currency transactions in California. Coinbase lists California as a state where people can buy and sell Bitcoins, but it is in a "grey zone" regulatory wise. The lack of regulation of virtual currency transactions in California could potentially affect the trust in Bitcoin for consumers in the state.

Consumers should be aware that Coinbase Exchange is not regulated or licensed by the State of California. This regulatory issue highlights the need for clear and consistent regulation in the virtual currency market to protect consumers and maintain trust in the industry.