Ireland Gives Go-Ahead To Coinbase VASP

Updated: 22 December 2022

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Coinbase has received a Virtual Asset Service Provider (VASP) license in Ireland. This license will allow Coinbase to offer crypto trading and retail services to European customers.

Coinbase receives VASP license in Ireland

Coinbase is the largest cryptocurrency exchange in the United States and has a large presence globally. However, the exchange’s expansion efforts in the US have been hampered by the lack of a clear regulatory framework. Therefore, Coinbase is now pursuing expansion into Europe, where crypto regulations are more established.

The regulatory approval in Ireland will allow Coinbase to extend retail trading to European customers through Coinbase Europe Limited. It will also offer crypto custody services through Coinbase Custody International.

Coinbase published a blog post saying that the approval came after the Irish Central Bank gave the green light to the company’s Electronic Money Institution. The EMI approval will allow Coinbase to provide digital payment services and issue virtual money in Ireland.

Ireland introduced the VASP registration framework in 2021. Under this framework, companies offering digital asset services must abide by the Criminal Justice Money Laundering and Terrorist Financing Act 2010. The central bank also holds the right to review the money laundering and anti-terrorism safeguards used by crypto companies.

According to Coinbase, receiving this regulatory approval was a boost to the growth of the crypto sector. The exchange also noted that the Markets in Crypto Assets (MiCA) regulation would allow Europe to create one of the best regulatory frameworks for the crypto market globally.

The Vice President of International and Business Development at Coinbase, Nana Murugesan, commented on the approval saying, “Our Irish regulatory approval demonstrates our commitment and collaboration with the Central Bank of Ireland. Coinbase views regulation of the industry as an enabler for crypto’s growth, setting clear ground rules that will create an environment which encourages innovation and strengthens trust in the sector.”

Coinbase CEO calls for crypto regulations in the US

While Coinbase is expanding its presence in Europe, the exchange’s efforts to grow its US business are being suppressed by the lack of a clear regulatory framework. The CEO of Coinbase, Brian Armstrong, said that crypto regulations were needed to protect investors.

Armstrong noted that the first phase of crypto regulations should focus on the crypto companies that had the potential to cause harm to investors, including stablecoin issuers, crypto custodians, and centralized exchanges.

He also proposed a way to determine which cryptocurrencies are securities. This could be done through another version of the Howey test, where a digital asset will not be considered a security if the issuer does not control it or make profits from it and the proceeds from the sale of the asset are not used to create a new project.

The crypto market in the US is currently regulated by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC Chair, Gary Gensler, has previously said that most cryptocurrencies were securities.

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