New York wants to set new standards that apply to crypto firms, raising the specter of more onerous state-level rules coming for the industry, Crystal writes.

Driving the news: Crypto exchanges regulated by the state, including Coinbase, Robinhood Crypto and SoFi, could be subject to new listing and delisting requirements, which build off existing guidelines.

Why it matters: The BitLicense has been long considered one of the strictest regulatory regimes for crypto, and recent developments, including an updated list of pre-approved coins, show New York is tightening the screws even more.

What's happening: New guidance and processes from the state yesterday detail how crypto firms are expected to evaluate coin listings before they are adopted, based on the agency's previously provided framework.

• The additional focus on token delistings would suggest the New York Department of Financial Services wants to institute a more orderly way for those processes to occur in light of the spate of enforcement actions that require them.

Context: The new guidance on token delistings follows on the heels of fintechs — like SoFi and Robinhood Crypto — removing tokens implicated in recent SEC enforcement actions.

• Robinhood ended support for ADA, SOL and MATIC in June after they were implicated as securities in lawsuits against Coinbase and Binance.
• SoFi ended support for DASH, ALGO, SOL, ADA, MATIC, FIL, ATOM and MANA that same month.

What they're saying: "We appreciate the chance to weigh in on this proposal — public engagement is a critical step in bringing further clarity to the entire industry," Paul Grewal, chief legal officer at Coinbase tells Axios.

• SoFi and Robinhood Crypto did not respond to requests for comment.

Flashback: The latest action by the state is part of a broader push by Gov. Kathy Hochul and DFS Superintendent Adrienne Harris to regulate crypto.

• Since April 2022, DFS has issued guidance for the use of blockchain analytics to prevent suspicious activities, dollar-backed stablecoins, guidelines for banking institutions picking up crypto, and around custodying assets.

What's next: The proposed guidance is open for public feedback until Oct. 20.

• DFS will review all feedback and issue final guidance; licensees are required to submit a de-listing policy by Jan. 31, 2024.

What we're watching: Whether the new rules will allow crypto firms to operate in the state, or whether they will further alienate industry proponents from setting up shop. (Probably the latter)

New York state's money cops have pulled back the number of coins that it has officially embraced (see below), Brady writes.

• Just what the embrace means has proven elusive as we've reported on it more, and it doesn't seem like anyone knew this list even existed. But anyway...

Details: The only two volatile cryptocurrencies that remain on its list are bitcoin and ether.

• BTC.D and ETH.D stand for bitcoin dominance and ether dominance, respectively. Each figure reflects the percent of the total crypto market cap accounted for by either coin.

By the numbers: Put the two together and they account for nearly 70% of all value in the industry. The current market cap is $1.1 trillion.

• Like in so many markets, two dominate and everyone else fights over third place.

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, Crystal writes.

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 with 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.

💬 Grayscale's CEO discusses its ongoing fight to change its fund into an ETF. (Axios Pro)

👨‍👩‍👦‍👦 FTX is suing SBF's parents to recoup funds. (The Block)

💰 Blockchain Capital announced two new funds with a total of $580 million. (Unchained)

👛 BONUS (OK we are late to this): The leading browser wallet is now a platform. (Metamask)

Ron Hammond, the policy man of the crypto lobbying group the Blockchain Association, laid out a thread this week catching everyone up on which balls are in the air in the Capitol these days, Brady writes.

• Crucially, he accompanied every post with a cat meme.
• It's worth a look to review some of the points of contention out there.

Quick take: It's not unusual for reports to come out saying that this is an industry that has fought any kind of rulemaking or regulation.

• This is simply irresponsible reporting.