Sep 18, 2023 - Economy

New York cuts list of pre-approved cryptocurrencies as it raises standards

A man's hand covering up a token.

Illustration: Eniola Odetunde/Axios

New York has quietly but dramatically shortened its list of pre-approved cryptocurrencies that regulated entities can readily exchange or custody on behalf of clients.

Driving the news: New York Department of Financial Services on Monday announced new standards for crypto exchanges, detailing new processes for listing and delisting coins — with it came an updated list of coins pre-approved by the state.

Of note: The new list features only the two largest cryptocurrencies — bitcoin and ether — and six stablecoins, compared to the two dozen that were on the list previously.

  • For any coins not on the shortened list, firms will have to go through the state's normal process of getting approval.

The big picture: The state's BitLicense is known for being tough on crypto, and the latest update of approved coins suggests that it's getting tougher.

  • What they're saying: DFS declined to explain the list's reduction when asked by Axios.

Flashback: Those regulated under New York's BitLicense regime were allowed to use coins on the designated list, and were asked to inform the agency before beginning their use.

  • The prior NYDFS list included aave, the basic attention token, bitcoin, Binance's namesake BUSD as well as bitcoin cash, dogecoin, litecoin, omiseGo and xrp.
  • New guidance appears to add specifics, asking licensees using coins from the list to alert DFS 10 days prior.

Be smart: Most trading on exchanges involves bitcoin and ether, but when the market is stronger, smaller tokens have greater volatility and some of the most successful traders profit off those larger shifts.

  • For comparison, there are about 240 cryptocurrencies listed on Coinbase.

What we're watching: Comments from the crypto firms that have seen their coins vanish from the list.

Go deeper: New York regulator could set world standard for crypto

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