I attest to what is mentioned above by the DFI. The fundmental issue with Coinbase is not its exchange services rather its payment services  akin to Paypal, where they will act as a middleman for companies that would like to accept bitcoin for payment but do not want to hold or deal with bitcoin. Instead bitcoin payments are sent to an address controlled by Coinbase and then converted into USD and transfered to the business. This is why Coinbase applied to operate as a money transmitter.

I applaud Mr. Fry's attempt at explaining the situation and the complexity of Bitcoin, but there are many inaccuracies in this article. I urge anyone interested in learning more about bitcoin to purchase Mastering Bitcoin by Andreas Antonopoulos