Coinbase is suspending its service in the state of Wyoming, citing local financial regulations as making it prohibitively costly to operate.
An update on Coinbase’s support forum reads:
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“The Wyoming Division of Banking has recently communicated regulatory policies which we believe will render continued Coinbase operations there impractical. In particular, we understand that the Wyoming Division of Banking interprets the Wyoming Money Transmitter Act to require licensure of entities which offer hosted bitcoin wallet services, and that as a condition of such licensure, licensees must maintain dedicated fiat currency reserves in amount equal to the aggregate face value of all bitcoin held on behalf of customers. Although Coinbase securely maintains 100% of all customer bitcoin, it is impractical, costly, and inefficient for us to establish a redundant reserve of fiat currency in equivalent value.”
With a population of roughly 585,000, Wyoming is the least populous state in the US. The impact is likely to be low, in contrast with states like New York and California that have taken recent steps to cement regulation.
Coinbase’s services are currently supported in 32 US states and territories, where it has either obtained money services licensing or it has deemed that it is not necessary.