Key Takeaways:
- Coinbase has secured a Virtual Asset Service Provider license
- The license will allow Coinbase to custody
- Coinbase is expanding its outreach in the EU market
Coinbase, the world’s third-largest cryptocurrency exchange by trading volume, has secured registration as a Virtual Assets Service Provider (VASP) from the Financial Markets Authority (AMF) in France, a spokesperson for the company confirmed on Thursday.
The license is effectively a green light for the American crypto trading platform to offer services such as custody of digital assets, buying and selling digital assets in legal tender, and operating a digital assets trading platform, in the country.
Coinbase Acquires License To Operate In France
Coinbase has been looking to increase its footprint in the European Union and has since last year started operations in Italy, Ireland, Netherlands, Germany, and Spain.
The French government is eager to attract crypto service providers to the country by offering greater regulatory clarity for the asset class than what currently exists in other countries, especially the US.
French regulators are embracing crypto and blockchain because they believe the technologies could improve payment systems and trading services while also ensuring that consumers are well-protected.
Meanwhile, the European Union (EU) recently signed off its landmark Market in Crypto Assets (MiCA) legislation, which is said to create a single crypto regulatory framework for companies operating within the 27-nation bloc, of which France is a part.
Under the MiCA, instead of seeking registration in every EU market, crypto firms could simply use a VASP license granted by one member nation as a “passport” to offer their services across the bloc. The MiCA will come into effect in 2024.
At present, Coinbase has received an e-money institution license and VASP registration in Ireland, a cryptocurrency exchange and wallet provider license in Germany, the Dutch Central National Bank’s (DNB) anti-money laundering and terrorist financing license, and further registrations in Italy and Spain.
In September, Coinbase registered with the Bank of Spain to provide the country’s crypto exchange and custody services. At the same time, the company is planning on making Ireland its European base.
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Crypto Firms are Facing Uncertainty in the United States
The crypto exchange’s VASP registrations in Europe come at a crucial time with it facing a more uncertain regulatory environment in its home country.
Since last year’s collapse of the FTX exchange, US regulators have started taking harsh actions against crypto companies.
In November, Binance – the world’s largest cryptocurrency exchange – settled all criminal charges made against it by the US Department of Justice (DoJ) after agreeing to pay more than $4 billion in fines while its CEO Changpeng “CZ” Zhao was forced to step down. CZ pleaded guilty to a felony charge that accused him of failing to take steps to prevent money laundering conducted through the platform.
In the meantime, the US Securities and Exchange Commission (SEC), which views certain cryptocurrencies as securities, has led aggressive campaigns against the sector, even targeting several crypto companies with strict enforcement actions and lawsuits.
The SEC demands that crypto service providers seek registration with the securities watchdog as it classifies the asset class they deal with as securities. This would require crypto exchanges and token issuers to present their financial disclosures and other paperwork to the agency.
The financial regulator even filed lawsuits against Coinbase and Binance, alleging that the firms engaged in the sale of unregistered securities in the form of crypto tokens. Both companies hit back at the SEC, saying they are compliant with financial regulations and are willing to go the extra mile to prove their innocence.
Coinbase even called for enacting bespoke rules for the crypto sector to end what it calls “regulation by enforcement”. The exchange also said it prefers to be registered in countries with sound crypto regulations than places where there are no clear rules put in place.
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