Coinbase Pushes for Crypto Clarity, Becomes UK's Largest VASP

Crypto exchange Coinbase has been actively engaging with regulators to promote clarity and growth in the digital asset sector. In recent letters to major banking regulators, including the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC), Coinbase has requested explicit confirmation that banks can provide crypto custody and trading services, either directly or through third-party providers.

Coinbase's chief policy officer, Faryar Shirzad, emphasized the need for regulatory clarity to enable banks to work with qualified third-party providers to serve their customers' crypto needs. The largest US-based crypto exchange by trading volume believes that while federal laws already permit banks to engage in crypto activities, regulatory uncertainty has hindered many institutions from entering the market.

In a separate development, Coinbase has received approval from the UK Financial Conduct Authority (FCA) to become the United Kingdom's biggest Virtual Asset Service Provider (VASP). This registration makes Coinbase the largest registered digital assets player in the UK, reflecting the government's and the FCA's welcoming stance towards crypto regulation. Coinbase views the UK as a key market for digital assets, with the potential to generate economic prosperity and growth.

Meanwhile, Chainalysis, a leading blockchain analytics company, has partnered with Lukka, a crypto software and data provider, to integrate off-chain data into its VASP risk product. This collaboration aims to enhance Chainalysis' ability to monitor and analyze off-chain transactions, further strengthening its risk management capabilities for virtual asset service providers.

The integration of off-chain data into Chainalysis' VASP risk product will enable the company to provide more comprehensive risk assessments for its clients, helping them to better identify and mitigate potential risks associated with off-chain transactions. This partnership underscores the growing importance of off-chain data in the crypto ecosystem and the need for robust risk management solutions to support the industry's growth.