New York Regulator Kicks XRP, DOGE others Off Approved List

The New York Department of Financial Services (DFS), which is the agency overseeing the digital asset space in the state of New York, has announced an update to its ‘greenlist’. On Monday, the regulator, known for being one of the toughest crypto regulators in the U.S., announced rule changes and delisted some tokens it had previously approved.

According to Axios, the previous list contained 25 tokens, including well-known names like XRP, AAVE, Dogecoin (DOGE), the Basic Attention Token (BAT), Litecoin, Bitcoin Cash, and omiseGo, among others. The updated version now includes only 8 tokens, such as Bitcoin and Ethereum, and other stablecoins such as Gemini Dollar (GUSD), Pax Gold (PAXG), and PayPal’s new PayPal Dollar (PYUSD).

The reason for the removal of the tokens was not immediately disclosed. However, any new listing projects will need to go through the standard approval process with DFS. Firms applying for listing must also develop policies regarding coin management, delisting procedures, and coin risk assessment, as stated in a department press release.

Crypto lawyer, and popular commentator on social platform X, John E. Deaton did not think the move was warranted, he said:

Regulatory Uncertainty Continues

While the DFS approach to crypto is generally welcomed for its rules that provide clarity, the DFS has one of the most stringent supervisory roles among all regulators in the United States.

In January 2023, Coinbase and the DFS reached a $100 million settlement on charges related to their failure to observe the regulator’s compliance program. In February, the department instructed the crypto firm Paxos to halt the issuance of its stablecoin BUSD, which it had previously released in partnership with Binance.

Notably the DFS is a state-based regulator with no federal oversight. While the SEC and the Commodity Futures Trading Commission (CFTC) oversee securities and commodities respectively, the regulatory jurisdiction for cryptocurrencies remains unclear. The SEC tends to categorize most cryptocurrencies as securities, while CFTC Commissioner Caroline Pham has been advocating for her agency to assume a leading role in cryptocurrency regulation.

Question Remains, Are Cryptos Securities

Speaking at an event organised by the Cato Institute, Pham recommended, “A time-limited CFTC pilot program to support the development of compliant digital asset markets and tokenization.” Pham stated the pilot would include, “registration and eligibility requirements, financial resources and other conditions, risk management, products and contract terms, and other requirements including disclosures and reporting.”

CFTC Chairman Rostin Behnam, a Democratic appointee, has not publicly endorsed the ideas put forth by Pham, a Republican. This highlights the current debate in the United States around crypto regulation, which is increasingly becoming a political issue.

Australian lawyer Bill Morgan commented that the clarity provided to XRP by Judge Torres’s ruling makes it even more perplexing why it was delisted:

The crypto market did not respond to the de-listing as of writing, and DOGE and XRP are both in the green for the time being.