it seems they are not licensed in California....
As I've read, they are close (or at least working) to achieving licensing everywhere... So it's probably a matter of time
a matter of time is not NOW. Coinbase is operating illegally NOW
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.
