Daily Byte: 10.24.2018

New York Authorizes Coinbase to Create Crypto Custody Trust

Per an announcement Tuesday, the New York State Department of Financial Services (NYDFS) approved an application from Coinbase to operate a crypto custody trust. The trust, the Coinbase Custody Trust Company LLC, will be allowed to offer secure custody services for bitcoin, bitcoin cash, Ether, Ethereum classic, XRP, and Litecoin. This is despite Coinbase not currently trading XRP.

“New York continues to be a leader in creating, fostering, and responsibly regulating a financial services marketplace that promotes innovation, safeguards the industry and protects consumers through strong supervision,” said NYDFS superintendent Maria Vullo, per the announcement. “Today’s approval further demonstrates that the state regulatory system is the best arena in which to responsibly supervise the growing fintech industry within a sound and compliant framework.”

Custodial trusts or custodial accounts are accounts set up with a custodian, whom takes fiduciary responsibility for them. The news comes as several other crypto firms, such as BitGo, Northern Trust, and Prime Trust – also received regulatory permission to serve as custodians. Earlier this year, Coinbase announced it was seeking to receive a broker-dealer license and a registered investment advisor license through the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority. These licensures would be needed to clear Coinbase to sell securities.

Japan Crypto Earns Self-Regulated Status

As reported by Reuters, the Japanese Financial Services Agency (FSA) Wednesday granted its crypto industry self-regulatory status. The Japan Virtual Currency Exchange Association (JVCEA) will now police and sanction the country’s exchanges. The Japanese crypto community has been under scrutiny following two high profile thefts in recent months.

The ruling gives the JVCEA the right to set the rules to protect customer interests and to prevent money laundering.

The change comes amidst regulatory deficiencies with the crypto industry. Prior to the $60 million USD theft from Tech Bureau Corp in September, the company was hit with two business improvement orders from the FSA.

The Japanese approach seeks a middle ground by taking a firm stance in protecting customers without strangling the growth of the crypto industry.

New HTC Phone Can Only Be Bought with Crypto

In a new wrinkle in the developing blockchain phone wars, HTC’s newest phone, the HTC Exodus 1, is now available for pre-order. However, you must buy the phone using either bitcoin or Ether.

The HTC Exodus 1 – priced at 0.15 BTC or 4.78 Ether (approximately $1,000 USD) – will have its own crypto wallet and a “secret enclave” developed by SoftBank’s Arm Holdings for segregating the user’s crypto keys from the Android operating system. The Exodus 1 is slated to be shipped in December.

While an important tool for crypto assets management, blockchain-powered cellphones could also allow users to leverage the power of blockchain technology to safeguard personal data and identifiable information. “The dominant companies in our world today are Google and Facebook, and in China, Baidu, Alibaba and Tencent, because they basically own all our data,” Phil Chen, HTC’s decentralized chief officer, told CNBC.

“And the reason why you do a blockchain phone is … for everybody just to own their own keys. Everything starts there. When you start owning your own keys, then you can start owning your own digital identity, then you can start to own data.”

The Exodus 1 will have company. The FINNEY blockchain smartphone is still available for pre-order.

Be fast, be clever, be wise. Most importantly, be here tomorrow for your Daily Byte.

Frederick Reese is a politics and cryptocurrency reporter based in New York. He is also a former teacher, an early adopter of bitcoin and Litecoin, and an enthusiast of all things geeky and nerdy.

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