The New York State Department of Financial Services (DFS) has taken a significant step in cryptocurrency regulation by introducing a "Greenlist" of approved digital assets. On August 3rd, DFS published this curated list containing:
- 10 cryptocurrencies approved for custody
- 8 cryptocurrencies approved for trading
Key Details About the DFS Greenlist
DFS clarified that "Any licensed entity may use the cryptocurrencies on the Greenlist for their approved purposes." As New York's primary crypto regulator since July 2014, DFS has granted 25 cryptocurrency licenses to date.
Approved Cryptocurrencies Include:
- Binance USD (BUSD)
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Ethereum Classic (ETC) [Custody only]
- Ethereum (ETH)
- Gemini Dollar (GUSD)
- Litecoin (LTC)
- Pax Gold (PAXG)
- Paxos Standard (PAX)
- Ripple (XRP) [Custody only]
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Important Compliance Requirements
- Licensed entities must notify DFS before using any Greenlist cryptocurrency
- DFS maintains authority to modify the list at any time
- Tokens may be removed, restricted, or the entire list suspended
Regulatory Background
DFS first proposed cryptocurrency adoption guidelines in December 2019, establishing two pathways:
- Greenlist Approach: Pre-approved coins requiring only notification
- Self-Certification: Approved entities can self-certify new tokens under DFS-approved policies
Notably absent from the list is USDT (Tether), possibly due to ongoing regulatory concerns dating back to 2019 New York legal actions.
Concurrent Regulatory Developments
The SEC recently confirmed Commissioner Hester Peirce ("Crypto Mom") for another five-year term. Peirce has been instrumental in:
- Advocating for Bitcoin ETF approval
- Pushing for clearer crypto regulatory frameworks
- Supporting industry innovation while protecting investors
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Frequently Asked Questions
Q: Can exchanges immediately trade all Greenlist coins?
A: No, licensed entities must first notify DFS of their intent to use specific coins.
Q: Why isn't USDT included?
A: Tether faces ongoing regulatory scrutiny in New York dating back to 2019 legal actions.
Q: How often does DFS update the Greenlist?
A: The department maintains discretion to modify the list at any time without set schedule.
Q: Can licensed companies add coins not on the Greenlist?
A: Yes, through the self-certification process if they have DFS-approved token policies.
Q: What's the difference between custody and trading approval?
A: Custody means holding assets for clients, while trading approval permits buying/selling activities.
Q: How does this affect New York crypto businesses?
A: It provides clearer compliance pathways while maintaining strong consumer protections.