California Still Unsure About Bitcoin Regulation

Unlike New York, Kansas, and Texas, which have either published proposed regulations or formal guidance, some states, such as California, have indicated that they are still trying to determine whether Bitcoin and other virtual currency activities are subject to licensure and regulation under their money transmitter laws.  On January 27th, the Commissioner of the California Department of Business Oversight, the state agency that licenses and oversees California money transmitters, issued a statement that it “has not decided whether to regulate virtual currency transactions, or the businesses that arrange such transactions, under the state’s Money Transmission Act.”  This statement was issued in response to Coinbase’s January 26th announcement that it has launched Coinbase Exchange, the first regulated bitcoin exchange based in the U.S.  The Department of Business Oversight warned that California consumers should be aware that Coinbase Exchange is not regulated or licensed by California.