Regulator refutes Coinbase Exchange regulation claims

California regulator the Department of Business Oversight has refuted claims made by Coinbase that its new bitcoin exchange is regulated.

California's Department of Business Oversight (DBO) has pulled up bitcoin wallet provider Coinbase over claims that its freshly launched bitcoin exchange is the United States' first regulated exchange for the cryptocurrency.

The DBO, which is charged with providing consumer protection and regulating various financial services, products, and professionals in the state, released a statement on Tuesday asserting that it has not yet decided whether to grant Coinbase's new bitcoin exchange regulatory approval.

"Numerous press accounts about Coinbase's January 26 launch of Coinbase Exchange erroneously reported the exchange has received regulatory approval from the state of California," DBO commissioner Jan Lynn Owen said in the statement. "The California Department of Business Oversight has not decided whether to regulate virtual currency transactions, or the businesses that arrange such transactions, under the state's Money Transmission Act.

"California consumers should be aware Coinbase Exchange is not regulated or licensed by the state," the DBO said.

Coinbase, which is based in San Francisco, announced on Monday that it had launched its new Coinbase Exchange platform, claiming it to be the "the first regulated bitcoin exchange based in the US".

The company has since indicated that it has received licences in 14 US states, along with assurances from eight other states that licences are not required, according to a report by Coindesk.

A representative for the company reportedly suggested that New York and California are two states that are still "working on their own bitcoin regulations".

California is one of the 24 states Coinbase lists as being serviced by Coinbase Exchange, which supports US dollars as well as bitcoin.

"We may expand this in the future to include other countries and currencies, but there is no plan for that [at] this stage. Only certain states within the US are supported," the company said on its website.

The DBO's challenge to Coindesk's regulation claims comes seven months after Californian Governor Jerry Brown signed a Bill repealing Section 107 of California's Corporation Code, which prohibited companies or individuals in the state from issuing money other than the "lawful money of the United States".

While Section 107 was generally not enforced, the move effectively made the use of bitcoin and other digital currencies legal in the state.

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