New York Financial Regulator Sets Higher Standards for Crypto Listings
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In Brief
The New York State Department of Financial Services (NYDFS) has proposed new guidelines to increase transparency and consumer protection around the listing and delisting of cryptocurrencies by state-regulated firms.
The New York State Department of Financial Services (NYDFS) is ramping up its regulatory oversight on cryptocurrency firms. The state body recently unveiled a proposed set of guidelines aimed at bringing more transparency and standardization to the listing and delisting of cryptocurrencies.
These changes reflect a broader trend, as NYDFS Superintendent Adrienne Harris suggests the update fills in the gaps identified through recent examinations.
NYDFS has clarified its expectations from cryptocurrency firms, articulating the criteria they must consider when listing or delisting a coin. The regulator provided a well-defined framework for firms to design their own listing and delisting policies.
The objective is twofold: protect consumers and ensure the soundness and safety of the financial ecosystem.
A Extension of Previous Requirements
NYDFS had earlier issued a framework in 2020 requiring cryptocurrency companies to seek approval for listing or offering custody for coins, with exceptions for a pre-approved “greenlist.”
The new guidelines expect companies to continue informing the regulator about the coins they offer or use, but a with more detailed criteria that includes governance, risk assessments and ongoing monitoring.
Superintendent Harris emphasized that these proposed guidelines also incorporate the first-ever guidance on how firms should go about delisting a coin. The agency wants companies to outline the type of incidents that would prompt them to remove a cryptocurrency and what their specific execution plans would be, such as notifying customers in advance.
Regulatory Ambitions Beyond State Boundaries
As Harris completes her second year at the helm, NYDFS is not just focusing on local regulations. The state body has been aiming to use New York’s leadership position in the banking and insurance sectors to influence the national regulatory landscape for cryptocurrencies.
Harris’s tenure has already seen $132 million in fines levied against crypto enterprises, including big names like Coinbase and Robinhood’s cryptocurrency division.
With its crypto unit tripling in staff over the past two years, NYDFS seems committed to maintaining a close eye on the fast-evolving crypto landscape. Harris pledged continued enforcement actions where necessary, highlighting the closure of Signature Bank in March as an example of the regulator’s proactive stance.
These new guidelines reflect NYDFS’s continued efforts to streamline the crypto space, emphasizing transparency, governance and consumer protection. The industry’s response to these heightened standards is still uncertain, as the proposal will remain open for public comment until October 20.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
More articlesNik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
