In a move aimed at bolstering investor protection, the New York State Department of Financial Services (NYDFS) has announced stricter regulations for cryptocurrency listing and delisting in the state. The guidelines, revealed on November 15, mandate that crypto companies must now seek NYDFS approval for their coin listing and delisting policies.
Crypto Compliance Mandate
These new measures, effective immediately, signify a significant shift in the oversight of digital currencies within the state. The NYDFS will evaluate company policies against more rigorous risk assessment standards, encompassing technological, operational, cybersecurity, market, liquidity, and illicit activity risks associated with the tokens.
Applicable to all digital currency business entities licensed under the New York Codes, Rules, and Regulation or limited purpose trust companies under the state’s banking law, these regulations have wide-reaching implications. Notably, companies that previously had their coin listing policies approved are now barred from self-certifying any tokens unless they receive explicit approval from the NYDFS.
Prominent players in the cryptocurrency space, including stablecoin issuer Circle, crypto exchange Gemini, fund manager Fidelity, trading platform Robinhood, and payments giant PayPal, are among those required to adhere to the newly implemented guidelines.
To ensure compliance, affected firms must engage with the NYDFS by December 8, 2023. They are expected to preview their draft coin listing and delisting policies during this meeting and subsequently submit them for approval by January 31, 2024.
Innovative Oversight for Crypto Listings
Adrienne Harris, the Superintendent of Financial Services, emphasized that the NYDFS plans to adopt an “innovative and data-driven approach” to supervise coin listings, delistings, and the broader cryptocurrency market.
Harris clarified that the new regulations do not signal a statewide crackdown on the digital asset industry. Instead, the objective is to create a well-regulated environment for New Yorkers to access the virtual currency marketplace while positioning New York at the forefront of technological innovation and progressive regulation.
This move follows the NYDFS’s earlier announcement in February, expanding its capabilities to identify illicit activities related to cryptocurrencies, such as insider trading and market manipulation.
As per an August report by Coinbase, approximately 690 blockchain-based companies are situated in New York, with 19% of New Yorkers reportedly owning digital assets. The state’s commitment to fostering a secure and innovative cryptocurrency ecosystem reflects the growing importance of digital assets in today’s financial landscape.
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