Hi everyone, welcome back to another Distributed Ledger newsletter. This is Anushree Dave, a reporter at MarketWatch.
Earlier this week, the New York State Department of Financial Services published guidance asking crypto firms to draft coin-listing policies so that there’s more transparency about how they list and delist crypto coins.
As part of the update, the DFS also removed over two dozen tokens from its “greenlist” of approved tokens, which included popular coins like Dogecoin, Litecoin, and Ripple. Tokens still on the list include Bitcoin, Ether, and the new PayPal dollar.
In 2022, crypto hacks and scams took over $3 billion from victims, and the U.S. Congress has since been trying to figure out the best way forward on crypto regulation. However, the new guidance from the New York DFS demonstrates how one state is approaching crypto regulation, and how the sector may evolve in the future.
But what will this mean for investors, especially those who opt to invest in riskier coins? I spoke to some crypto industry insiders to get their reactions.
Regulation reactions
With major exchanges already having well-established and time-tested standards in New York, “at present, the impact of this news on the market is limited,” said Gracy Chen, managing director of Bitget, a crypto derivatives exchange. “However, the framework being pushed by New York may have adverse effects on the compliance and liquidity of local market projects — especially those that do not align with the proposed framework — potentially causing abnormal market fluctuations.”
Others worry that the regulations may impact innovation in the sector, as is a usual concern with regulating crypto. “While there’s concern that innovation may face headwinds due to tighter oversight, the true North here seems clear: crafting a cryptocurrency market that’s transparent, secure, and resistant to scams,” Nikolay Denisenko, co-founder and CTO of the Brighty App, a neobank.
But until we have federal government leadership in the area, the benefits of these kind of state rules will be muted, said Rahsan Boykin, general counsel at Hashflow, a crypto trading platform.
Crypto in a snap
Bitcoin
BTCUSD,
is trading at around $26,700 as of Thursday morning, gaining 2.13% in the past 7 days, according to CoinDesk data. Ether is trading at $1,954 dipping 0.37% in the past week.
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