Connecticut Banking Commissioner Jorge L. Perez has fined a New York company that provides a platform for trading digital digital assets, such as cryptocurrency, $30,000 for operating in the state without a required license. Perez entered into a consent order with Coinbase Custody Trust Co. LLC on July 25, stemming from an investigation by the […]
Connecticut Banking Commissioner Jorge L. Perez has fined a New York company that provides a platform for trading digital digital assets, such as cryptocurrency, $30,000 for operating in the state without a required license.
Perez entered into a consent order with Coinbase Custody Trust Co. LLC on July 25, stemming from an investigation by the state Department of Banking’s Consumer Credit Division.
Coinbase Custody Trust Company is a wholly owned subsidiary of Coinbase Global, a publicly traded cryptocurrency exchange.
The investigation found that, since at least 2019, Coinbase had engaged in the business of money transmission in Connecticut without the required license, which is a violation of state statutes.
Based on the consent order, Coinbase will pay $5,250 in back licensing fees in addition to the $30,000 civil penalty.
Also on July 25, Perez in an unrated case revoked the broker-dealer registration of Arcstone Securities LLC, a New York-based financial services firm, following the company's failure to maintain required licensing and respond to regulatory enforcement proceedings.
The revocation order concluded a case that began more than a year ago when Connecticut regulators identified compliance violations at the firm, formerly known as Arcview Capital LLC.
According to the enforcement order, Arcstone Securities violated a state statute by failing to maintain a broker-dealer agent registration. The violation persisted despite multiple requests from the Department of Banking’s Securities and Business Investments Division to correct the deficiency.
The state issued a notice of its intent to revoke Arcstone Securities’ broker-dealer registration on April 24, 2024.
Arcstone Securities did not request a hearing to challenge the allegations within the required timeframe, so the allegations were deemed admitted by default.
The revocation order permanently bars the firm from operating as a registered broker-dealer in Connecticut.
Broker-dealers must maintain current registrations for both their firms and individual agents to legally conduct securities business in Connecticut.
The revocation prevents Arcstone Securities from soliciting clients, conducting transactions or providing investment services to Connecticut residents.
