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On Monday, the New York Department of Financial Services (DFS) restructured its approach to cryptocurrency oversight. Consequently, digital currencies like Ripple and Dogecoin have been axed from its acclaimed “greenlist.” However, Bitcoin, Ether, and the emerging PayPal Dollar have retained their spots
DFS’s Stance on Crypto Regulation
Besides its recent changes, DFS has positioned itself as a vanguard in digital asset regulation. The introduction of its BitLicense program and virtual currency unit has further cemented its status. Moreover, while many in the crypto sphere have expressed discontent with its meticulous licensing methodology, DFS’s revised guidance underscores its deliberate strategy in cryptocurrency regulation.
Previously, the greenlist boasted 25 tokens, including Ethereum, Litecoin, and the novel PayPal Dollar. However, this number has significantly dwindled to just eight under the latest revisions. Significantly, USDC stablecoin did not find a place on the old or new greenlist renditions.
Additionally, shedding light on the controversial decision surrounding Ripple, John Deaton stated,
“ After it was determined NOT to be a security. It’s not even a security if Ripple sells it on exchanges. Yeah, this move isn’t political or punitive,”
The new guidance is also poised to “clarify” the DFS’s expectations regarding token-listing and delisting procedures. Coin-listing policies will now witness elevated risk assessment standards. Moreover, there will be augmented requisites for businesses targeting retail consumers.
Hence, diverging from the earlier self-certification protocol, companies must establish robust token-delisting policies, ensuring minimal disruption for coin users if particular support terminates.
Industry Challenges Amid Regulatory Uncertainty
Under Superintendent Adrienne Harris’s tenure, DFS has exhibited stringent oversight, particularly during crypto’s bear phases. For instance, a notable $100 million settlement was reached with Coinbase in January 2023 due to non-compliance. The subsequent month witnessed the DFS directing Paxos, a crypto entity, to cease issuing its renowned stablecoin, BUSD.
Nevertheless, despite its rigid stances, many in the U.S. crypto sector have come to respect DFS’s methods. Other regulatory bodies, such as the Securities and Exchange Commission, have been tentative in formulating regulations for this unpredictable sector. Hence, the refreshed greenlist exemplifies the ongoing predicaments crypto enterprises, especially exchanges, confront amid regulatory ambiguity.
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