Coinbase is back in Wyoming after a four-year absence. The California-based crypto exchange and wallet provider left the state in mid-2014 because of stipulations in state law the required all exchanges to “double reserve” the digital assets of state residents with fiat currency.
According to an article in cointelegraph.com, the exchange chose to suspend services as soon as its operations as a cryptocurrency exchange were deemed by legislators to fall subject to certain conditions for licensure stipulated under the Wyoming Money Transmitters Act (specifically, Chapter 22 of Title 40 – Trade and Commerce, which was introduced in the Wyoming Statutes of 2011 and came into effect by 2014).
The Act had hitherto been interpreted by the Wyoming Division of Banking as requiring “licensees [to] maintain dedicated fiat currency reserves in amount equal to the aggregate face value of all bitcoin [sic.] held on behalf of customers,” which Coinbase found to be “impractical, costly, and inefficient.”
As Cointelegraph reported in March, House Bill 19 regarding the exemption of virtual currencies from the Wyoming Money Transmitter Act was passed with a majority of 28-3 by the Wyoming state legislature on March 5 of this year, allowing Coinbase to apply for a license under which it can resume operations as a compliant and regulated exchange.
Alongside House Bill 19, Wyoming also passed House Bill 70 that exempts certain blockchain tokens from securities regulations and money transmission laws, as well as passing a further cryptocurrency related bill, Senate Bill 111, in February that exempts virtual currencies from state property taxation.
Coinbase gave full credit to Wyoming House of Representatives Majority Floor Leader David Miller; State Senator Eli Bebout; members of the Blockchain Task Force, and their colleagues for working with them to find a solution that allows cryptocurrency custodians and exchanges to reestablish operations.
“We are also grateful for the assistance of Commissioner Forkner, Deputy Commissioner Mulberry, along with the examiners and staff from the Wyoming Division of Banking in their prompt approval of our money transmitter application,” Coinbase said in a release.
“The leadership and partnership between the state legislature and Governor Matt Meade allowed for this new legislation to be signed into law, under which cryptocurrency companies in Wyoming are no longer required to double reserve the assets of state residents. Now Coinbase and other compliant, regulated cryptocurrency companies can serve Wyoming customers in the same way we serve customers from nearly every other state.”
Wyoming customers should have access to their Coinbase accounts, and to the extent any funds (USD or cryptocurrency) were stored in their accounts, they will have access to those funds. If any Wyoming resident is unable to access their accounts or withdraw funds, we encourage them to contact our customer support team to have access restored, the Coinbase release concluded.