Group items tagged

In June 2022 the New York Department of Financial Services (NYDFS) issued formal guidance for NYDFS-approved stablecoin issuers, including upgrades to the amount and quality of information that issuers must provide to the public.

The New York Department of Financial Services (NYDFS) is reportedly investigating stablecoin issuer Paxos. The full scope of the investigation is unclear. Paxos' stablecoins include the Pax dollar (USDP) and Binance USD (BUSD). Paxos has been in the news recently over rumors the U.S. Office of the Comptroller of the Currency - a federal bank regulator - may ask it to withdraw its application for a full banking charter. Paxos has denied these rumors. Paxos also holds a virtual currency license (BitLicenses) issued by NYDFS.

"BitGo obtained a New York Trust (becoming a New York Limited Liability Trust Company) from New York Department of Financial Services (NYDFS) to operate as an independent, regulated qualified custodian under New York State Banking Law. The Trust Charter enables BitGo to provide custodial services for New York clients who need to secure large amounts of digital assets with designated entities that offer the highest level of security, regulatory oversight and operational efficiency. Additionally, a New York Trust Charter allows a company to provide custodial services in many other states without obtaining additional licenses. To date NYDFS has only approved a handful of Trust Charters for companies engaged in virtual currency business activity, including Gemini, Coinbase and Paxos."

Paxos Trust lawyer and chief compliance officer Dan Burstein claims that Tether's USDT and Circle's USDC are unregulated "stablecoins" in name only. Paxo-issued Paxos Standard (PAX) and Binance Dollar (BUSD) are approved and regulated by the New York State Department of Financial Services (NYDFS). That means each token is backed by reserves in the safest instruments, such as bank deposits insured by the US Federal Deposit Insurance Corporation or short-term maturity US Treasuries. Gemini Dollars (GUSD) issued by Gemini Trust Company, are similarly NYDFS regulated

Paxos Trust lawyer and chief compliance officer Dan Burstein claims that Tether's USDT and Circle's USDC are unregulated "stablecoins" in name only. Paxo-issued Paxos Standard (PAX) and Binance Dollar (BUSD) are approved and regulated by the New York State Department of Financial Services (NYDFS). That means each token is backed by reserves in the safest instruments, such as bank deposits insured by the US Federal Deposit Insurance Corporation or short-term maturity US Treasuries. Gemini Dollars (GUSD) issued by Gemini Trust Company, are similarly NYDFS regulated.

New York State Department of Financial Services proposed to modify the new crypto-asset approval process. The NYDFS currently approves every crypto-asset on a case-by-case basis with individual exchanges. The NYDFS is proposing that any crypto-assets approved for listing in New York can be listed by any exchange that operates in the state, and the regulator will publish a model framework for crypto-asset listings that exchanges should model their versions around.

Linda Lacewell, superintendent of the New York Department of Financial Services (NYDFS) reported that the crypto space has reacted positively to the new changes made to the BitLicense. These included the creation of a conditional license designed not to burden startups with the heavy costs of applying for a full BitLicense. Instead, they can partner with existing licensed entities to legally operate in New York.

The New York State Department of Financial Services (NYDFS) has granted the first "conditional BitLicense" to PayPal for a partnership with Paxos Trust Company enabling customers to buy and sell crypto-assets. Now New York State-chartered Paxos will be able to provide trading and custodial services to PayPal to allow the latter's 325-plus million customers to buy, sell, and hold crypto-assets. Four NYDFS-approved digital assets will be initially available: bitcoin, bitcoin cash, ether and litecoin. https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202010211

In June 2022, the New York Department of Financial Services (NYDFS) issued formal guidance for NYDFS-approved stablecoin issuers, including upgrades to the amount and quality of information that issuers must provide to the public. With the new guidance, management's assertions must now be tested and published no later than 30 days after the end of the month, but also on one randomly selected business day during the month. Secondly, stablecoin issuers will be required to submit their internal controls to audit. However, the new regulations apply to Gemini dollar (GUSD) Binance USD (BUSD) and Paxos dollar (USDP).

The NYDFS will require auditors to not only examine a stablecoin's end-of-the-month asset count, but also run a check on "at least one randomly selected business day during the period." Requiring a random in-between day examination prevents a stablecoin issuer from holding one set of risky assets for most of the month only to switch into safer assets the day before the auditor examines it.

The New York Department of Financial Services (NYDFS) has granted virtual currency licenses to two subsidiaries of aspiring crypto derivatives provider Seed CX.

Binance, in partnership with the Paxos Trust Company, is launching a dollar-backed stablecoin in the U.S. with the blessing of the New York Department of Financial Services.

Gemini Trust Company, a regulated custodian overseen by the New York Department of Financial Services (NYDFS), now offers "Gemini Custody," a platform which would enable clients to trade assets instantly by offering them credits.

The New York State Department of Financial Services (NYDFS) has approved the application of Bakkt Marketplace for virtual currency and money transmitter licenses. First granted to Paxos in 2015, the BitLicense is New York's program for regulating virtual currency firms. With it, Bakkt will have new access to offer crypto trading in the financial center of the United States. https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202103111

The U.S. Court of Appeals for the Second Circuit revived the Office of the Comptroller of the Currency's (OCC) controversial special-purpose national bank charter that had been challenged by the New York Department of Financial Services (NYDFS) and effectively suspended by a ruling from the U.S. District Court for the Southern District of New York.

The New York State Department of Financial Services has joined the Global Financial Innovation Network. Launched by the U.K.'s Financial Conduct Authority, GFIN is a network of 50 international organizations committed to supporting financial innovation in the best interests of consumers.

The New York State Department of Financial Services and France's Autorite de Controle Prudentiel et de Resolution will work to "ease the entry" for fintech innovators into their respective markets. The aim is to encourage innovation in the financial services markets by supporting financial firms that abide by their respective regulations, while still protecting consumers. The NYDFS and ACPR will refer fintech innovators to each other to, in principle, improve speed to market. https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202006031

Paxos will now disclose on a monthly basis the specific financial instruments backing its USDP and BUSD stablecoins, in addition to its attestations. These reports will provide the CUSIP numbers of all instruments backing USDP and BUSD, showing that Paxos only backs its stablecoins with cash, overnight loans secured only by US Treasuries, and US Treasuries with a less than 90 day maturity. As a Trust Company chartered by the New York State Department of Financial Services ("NYDFS"), Paxos is legally required to hold all regulated stablecoin reserves in bankruptcy remote, fully-segregated accounts and in only cash and cash equivalents.

"It's likely the Circle NYDFS complaint did not refer to the Ethereum stablecoin for which Paxos is responsible. Binance issued pegged stablecoins using the same BUSD branding on other blockchains, which were meant to be backed one-for-one by the Ethereum BUSD issued by Paxos. However, records show they were not fully backed at all times in the past. Binance claimed there was a process issue resulting in timing differences which have been corrected."

Paxos Trust will stop minting new Binance USD (BUSD) tokens starting from February 21, 2022 in accordance with directions and coordination with the New York Department of Financial Services (NYDFS). All existing BUSD tokens will remain fully backed and redeemable through Paxos until at least February 2024. Customers will be able to convert their BUSD tokens to Pax Dollar (USDP) another Paxos-issued stablecoin.