Crypto Regulation | Sep 19, 2023

Image: Unsplash/Shubham Dhage

The New York Department of Financial Services (DFS) has revamped its crypto oversight, notably removing Ripple, Dogecoin, and Litecoin from its approved “greenlist.”

While DFS continues to lead in digital asset supervision, the crypto world is witnessing varied regulatory approaches globally. From Solana Labs emphasizing robust U.S. regulations to Hong Kong’s potential tightening after the JPEX probe, 2023 is shaping up to be a landmark year for crypto governance and regulation.

What recent changes did the New York Department of Financial Services (DFS) announce regarding its virtual currency oversight?

• Yesterday, the New York Department of Financial Services (DFS) revealed an update to its virtual currency oversight regime. This update introduced new criteria for how digital firms licensed by the agency can list different cryptocurrencies.
• As a significant part of this overhaul, DFS removed over two dozen tokens from its “greenlist” of approved tokens. Notably, Ripple, Dogecoin, and Litecoin were among those removed. However, eight tokens, including Bitcoin, Ether, and the new PayPal Dollar, remain on the list.

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How has DFS positioned itself in the crypto regulation landscape?

• DFS has emerged as a nation-leading digital asset supervisor, primarily due to its BitLicense program and virtual currency unit.
• While the crypto industry often criticizes DFS for its rigorous licensing process, the recent guidance showcases DFS’s balanced approach to crypto regulation. This is in contrast to other state and federal agencies that lean more towards enforcement actions.

What was the purpose of the DFS greenlist, and how has it changed?

• The DFS greenlist was created as an integral part of its broader crypto supervision. Previously, firms licensed by DFS could gain approval to custody and list tokens through a self-certification system. This system streamlined the process while still granting DFS a supervisory role.
• Once two firms had self-certified a token for either custody or listing, it would be added to the DFS greenlist.
• This meant that any DFS-licensed firm could approve the token for custody or listing, further speeding up the process. However, with the new guidance, the greenlist has been significantly reduced, now featuring only eight tokens.

How does the international crypto regulation landscape look in 2023?

• Internationally, the crypto regulation landscape is evolving rapidly. For instance, Anatoly Yakovenko, co-founder of Solana Labs, has emphasized the importance of comprehensive cryptocurrency regulations in the United States to maintain its leadership in the blockchain and Web3 sectors.
• Also, Hong Kong, a significant player in the crypto world, is considering tightening its crypto regulations. This comes in the wake of an investigation into the crypto exchange JPEX, which led to six arrests and numerous reports of financial losses.

Crypto regulations in the future

As the crypto industry continues to grow and evolve, regulatory bodies worldwide will likely introduce more stringent and detailed guidelines to protect investors and ensure market stability.

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The recent actions by DFS and other global entities highlight the importance of a balanced approach to regulation, ensuring innovation while safeguarding investor interests.

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• Source: https://ncfacanada.org/new-yorks-dfs-remove-ripple-and-dogecoin-from-greenlist/