Problems with New York Regulation: Dogecoin and Ripple
The New York Financial Supervisory Authority has removed Dogecoin and Ripple from its “green list” of approved cryptocurrencies due to their failure to meet the established criteria in the crypto industry. This highlights the regulatory challenges faced by these assets.
New York’s Cryptocurrency Oversight Regime
The New York Department of Financial Services (DFS) recently updated its cryptocurrency oversight regime, introducing new criteria for listing cryptocurrencies by authorized digital companies. As a result, the DFS revoked approval for several tokens, including Ripple, Dogecoin, and Litecoin.
Currently, only eight tokens remain on the green list, including Bitcoin, Ether, and PayPal’s new digital currency.
A Balanced Approach to Regulation
The DFS has established a national leadership position in digital asset oversight through its BitLicense program and virtual currency unit. While criticized for its meticulous licensing process, this new directive demonstrates the balanced approach taken by the DFS in regulating cryptocurrencies.
Changes to the Green List
The DFS previously created a green list of approved tokens as part of its crypto oversight framework. Tokens could be added to the list through a self-certification process by licensed firms. However, the recent update has reduced the green list to only eight tokens.
New Expectations and Risk Assessment Standards
Along with updating the green list, the DFS plans to raise risk assessment standards for coin listing policies and improve requirements for retail trading activities. License holders will also be required to implement coin deletion policies to mitigate impacts on users.
New York DFS at the Forefront of Crypto Regulation
Under Superintendent Adrienne Harris, the DFS has taken a strict oversight role in the cryptocurrency market. It has issued sanctions against crypto companies, including a $100 million settlement with Coinbase and an order to Paxos to cease issuing BUSD.
Regulatory Uncertainty for Crypto Companies
The green list update reflects the ongoing dilemma faced by cryptocurrency companies, particularly exchanges, in determining which tokens to include due to regulatory uncertainty.
Hot Take: New York DFS Leading the Way in Crypto Regulation
The New York Department of Financial Services (DFS) has taken a proactive approach to regulating cryptocurrencies, as demonstrated by its recent update to the green list. By revoking approval for tokens such as Dogecoin and Ripple, the DFS is ensuring that only cryptocurrencies that meet its established criteria are listed. This balanced approach sets a national standard for digital asset oversight and positions the DFS as a leader in the regulatory sphere. While other state and federal agencies opt for punitive actions, the DFS focuses on clarifying expectations and raising risk assessment standards. The green list update reflects the challenges faced by crypto companies amidst regulatory uncertainty.
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