FinCen doesn't "license" anybody to do anything. Financial institutions have to register with FinCen for anti-money-laundering purposes, but that's an additional requirement on top of other regulation. Registering with FinCen is just filling out a form; they don't examine or approve it. It just makes FinCen aware that you exist.

A US Bitcoin exchange could register as a regular securities broker/dealer with the SEC, and that would preempt state regulation. That would be a reasonable direction for Coinbase, which has been a broker/dealer in Bitcoins for a year or so.

For what it's worth, their Iowa license has a location for Coinbase:

1 Front Street
Suite 2600
San Francisco CA 94111

The Market St. address they give on their web site is a mail drop. The Bluxome St. they gave on their SEC filing to issue stock is someone's apartment. This is at least an office in an office building.

Enron. MF Global. ...

Right here.

"We’re happy to announce Coinbase Exchange, the first regulated bitcoin exchange based in the U.S. With this launch our goal is to bring increased stability to the bitcoin ecosystem.

Coinbase Exchange provides a reliable and secure platform for bitcoin trading that is backed by investors such as the New York Stock Exchange. If you are a Coinbase user in one of the 24 supported U.S. states or territories you can begin trading immediately on Coinbase Exchange."

The list of 24 states includes California.

Right. Coinbase is not a licensed money transmitter in California. The head of the California Department of Business Oversight issued a press release yesterday: "Numerous press accounts about Coinbase’s Jan. 26 launch of Coinbase Exchange erroneously reported the Exchange has received regulatory approval from the State of California. ... California consumers should be aware Coinbase Exchange is not regulated or licensed by the State."

It's not "a matter of time", either.  Because California has a lot of people sending money home to Mexico, and there have been troubles with money transmitter companies "losing" payments, California has very consumer-friendly money transmitter laws. For example, if a money transmitter doesn't deliver the money to the payee or return it to the sender within 10 days, they owe the sender $1000 plus the amount sent plus legal fees. The sender can sue in small claims court.

A money transmitter in California has to post bonds against loss, maintain 100% reserves (they're really strict about that), be audited by the state, and have criminal background checks on the people involved. People who have entrusted money to a money transmitter in California have first claim on any assets of the company if it goes bust, ahead of any other creditors.

All the other online payment services in California, PayPal, Square, Venmo, Amazon, Google, etc. are registered. Not Coinbase.

The last year of Bitcoin. Daily median price, so some of the brief spikes during slow trading periods don't show.

It's been consistently downhill since June, with about ±$50 variation around the straight-line trend.

Then the media found out Coinbase was faking it, and the coverage turned negative.

SFgate: "Bitcoin exchange claims it is 'regulated,’ but not in California"

Time Magazine issued a correction. The Wall Street Journal updated their article.  Tomorrow's coverage will probably be more negative.  Claiming you're regulated when you're not yields very bad publicity.

Just because they have some VC money apparently doesn't mean they have a clue.

The alts are dead. Only 8 alts still have a market cap above $10M. Ripple is the last remaining altcoin with a market cap above $100M. LTC has fallen below that threshold.  So has Paycoin, after the collapse of the "funded $20 support level" from GAW miners.

With most of the alts, the creators own a big fraction of the market cap, so liquidity is much smaller than price x coins created.

Today, the California Department of Business Oversight issued a warning on Coinbase:

“Numerous press accounts about Coinbase’s Jan. 26 launch of Coinbase Exchange erroneously reported the Exchange has received regulatory approval from the State of California.  The California Department of Business Oversight has not decided whether to regulate virtual currency transactions, or the businesses that arrange such transactions, under the state’s Money Transmission Act.  California consumers should be aware Coinbase Exchange is not regulated or licensed by the State.”

So Coinbase is not a regulated exchange.

The Wall Street Journal and Time have picked up on the fact that Coinbase doesn't have all the money transmitter licenses they claim to have.

Time: "Correction: A previous version of this article reported the Wall Street Journal’s claim that Coinbase had achieved regulatory approval in 24 states, including New York and California. That article has been updated to reflect that Coinbase is working to receive regulatory approval and this article has been updated to reflect that change."

I don't believe the "regulated and licensed" hype. At best, they're a licensed money-transfer operation. They don't even have a money transfer license in California.  Here's the official California list.. All the other companies with payment systems are on there, from PayPal to Venmo. Not Coinbase. And no, the list isn't wrong; I called and checked. No Coinbase.

Well, Coinbase announced their API. It's straightforward REST/JSON. There's a discussion on Hacker News. They're running on Amazon AWS, in the US East zone. They recommend that trading 'bots also run on AWS in that zone for reduced latency. Initially, there will be no fees, but later, fees will be imposed for transactions which "reduce liquidity" (i.e. are executed immediately). Putting up walls is free.

It looks like they're setting themselves up for high frequency trading. They may have huge volume, but it will be the same money going round and round. 

They claim to be "licensed" in at least New York and California, but they're not on the money transmitter lists for either state.

Right. The Winkelvoss ETF is a dump. They own a lot of Bitcoins and are looking for an exit. They'd crash the existing exchanges if they tried to exit that way. This is another way to do a big dump.

Bitcoin mining has become a skinny business. Miners have to sell to pay their costs. Cex.io just dropped out of mining because they were losing money on it.

Mining and speculation are different businesses. The same party can do both, but you have to account for them separately.

Coinbase says that "the Coinbase vault has zero fees".

Uh oh. If they don't charge a fee, how do they make money?

The traditional Bitcoin wallet ways of making money were speculating with customer funds and stealing them.

That's the basic problem with authenticating to a new device via an omnidirectional radio signal. You don't really know who you're talking to, and you have no shared secret prior to authenticating.

Karpeles is a third-rate PHP programmer with no theory training. He didn't invent Bitcoin.

Silk Road, maybe. 

Look at the chart for the last 6 months. There's been a consistent $50 variation around a declining trend.

Right. No matter what the payment system in use, NFC and Bluetooth communications have serious security problems. It's really tough authenticating securely to a device you've never seen before.

There's something to be said for credit cards with mag stripes and contact-type credit cards. They're not readable while they're inside your wallet.

And back down to $208. We've had ±$50 variance around a declining trend for months now.