NY DFS Approves Two New Dollar-Pegged Cryptocurrencies

The New York State Department of Financial Services ("DFS") authorized two companies to offer price-stable cryptocurrencies ("stablecoins") pegged to the U.S. dollar.

According to DFS, the two companies – Gemini Trust Company LLC and Paxos Trust Company LLC – were each required to undergo a rigorous application process and were able to meet stringent criteria for offering these products, which require:

• that the authorized stablecoins are fully exchangeable for a U.S. dollar;
• that each company implement, monitor and update effective risk-based controls to prevent products from being used in connection with money laundering or terrorist financing, and to prevent violations of sanctions promulgated by the Office of Foreign Assets Control;