New York Department of Financial Services Updates Virtual Currency Oversight Standards
The New York Department of Financial Services (NYDFS) has released updated standards for its virtual currency oversight, resulting in the removal of Ripple (XRP) from its approved list of cryptocurrencies. The NYDFS has created a new list called the “Greenlist” which includes only eight cryptocurrencies that meet the agency’s stringent criteria, such as Bitcoin, Ether, and stablecoins.
The updated standards provide clear guidelines for licensed crypto firms regarding the listing of various cryptocurrencies. All digital firms operating under NYDFS licensing, including cryptocurrency exchanges and wallets, must adhere to these guidelines. Any firm or token not on the approved list will be required to submit applications to the NYDFS for cryptocurrency listing.
Stricter Guidelines and Questions about XRP
Under the new guidance, licensed firms must submit a comprehensive application to the NYDFS before listing a new cryptocurrency. The application must include detailed information about the cryptocurrency’s security, stability, liquidity, and compliance with relevant laws and regulations. The NYDFS will review the application and may request additional information before making a decision on whether to approve the listing.
However, it is unclear whether these stricter guidelines apply to XRP. Popular Ripple attorney John E. Deaton argues that since XRP has been determined not to be a security by a judge’s ruling in July 2023, it should not be singled out by the NYDFS. Deaton believes that an appeal from the SEC is unlikely to reverse this ruling.
NYDFS’s Approach to Crypto Regulation
The NYDFS is known for its rigorous oversight of virtual currencies in the United States through its BitLicense program and virtual currency unit. While criticized for its perceived slow licensing process, the agency’s new guidance on cryptocurrency listing demonstrates its deliberate approach to crypto regulation, distinguishing it from other state and federal bodies that rely more on enforcement actions.
Hot Take: NYDFS Sets Stricter Standards for Cryptocurrency Listings
The New York Department of Financial Services (NYDFS) has introduced updated standards for virtual currency oversight, removing Ripple (XRP) from its approved list of cryptocurrencies. The agency’s new guidelines require licensed crypto firms to submit comprehensive applications before listing new cryptocurrencies. This move has raised questions about the treatment of XRP, which has previously been determined not to be a security by a judge’s ruling. Despite criticisms of its licensing process, the NYDFS’s approach to crypto regulation demonstrates its commitment to ensuring compliance and transparency in the industry.
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