Regardless of whatever private insurance it has, Coinbase does not have a money transmission license in California or a surety bond as required by federal and state law.
Interestingly, Coinbase appears to offer false information to the State of Florida in item 6(A)(2) of its application, which has since been withdrawn. Coinbase did receive a subpoena in the NY DFS's investigation of various Bitcoin companies in August, 2013. See http://www.reuters.com/article/2013/08/12/us-digitalcurrency....
I don't know how anyone who reads your experience with facecash could come to any conclusion other than the only way to innovate in payments is to brazenly break the law and never even try to deal with the California DFI.
One difference between my experience with regulators and Coinbase's is about $31.7 million in venture capital funding. Compliance is expensive, but they can afford it.
They know they need one; they have applied in other states, such as Florida. See https://archive.org/download/coinbasefloridamtl/20140415.coi....
Interestingly, Coinbase appears to offer false information to the State of Florida in item 6(A)(2) of its application, which has since been withdrawn. Coinbase did receive a subpoena in the NY DFS's investigation of various Bitcoin companies in August, 2013. See http://www.reuters.com/article/2013/08/12/us-digitalcurrency....