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FameEX Hot Topics | New York Financial Regulator Strengthens Guidelines for Crypto Listings

2023-11-16 16:32:25

The New York State Department of Financial Services (NYDFS) has recently introduced stringent guidelines for cryptocurrency firms operating within New York. Announced on November 15, these regulations are aimed at enhancing investor protection by mandating crypto companies to seek NYDFS approval for their coin listing and delisting policies. These policies will be rigorously evaluated against comprehensive risk assessment standards, encompassing technological, operational, cybersecurity, market, liquidity, and potential illicit activities associated with cryptocurrencies.

These regulations apply to all digital currency businesses licensed under the New York Codes, Rules and Regulation, and to limited purpose trust companies as per the state’s Banking Law. The NYDFS had previously sought public opinions on this proposal in September.

Under the new framework, cryptocurrency firms that already have an approved coin listing policy are no longer allowed to self-certify tokens without the NYDFS’s direct authorization. These firms are required to convene with the NYDFS by December 8, 2023, for a preliminary review of their proposed coin listing and delisting policies. The final submission of these policies is due by January 31, 2024.

Superintendent of Financial Services, Adrienne A. Harris, highlighted that the NYDFS intends to employ an innovative and data-driven approach in overseeing the processes of coin listings and delistings, as well as the broader cryptocurrency market. Harris emphasized that these new regulations are not indicative of a statewide crackdown on the cryptocurrency sector. Instead, the focus is on ensuring that New Yorkers have access to a well-regulated virtual currency marketplace, while maintaining New York’s status as a hub for technological innovation and progressive regulation.

Earlier in February, the NYDFS enhanced its capabilities to detect and address illicit activities in the cryptocurrency sector, including insider trading and market manipulation. These latest guidelines are part of the state's continuous efforts to safeguard investors and to uphold New York's position as a leader in fostering technological advancements and forward-thinking regulatory practices in the evolving digital currency landscape. The measures reflect a commitment to balancing innovation in the cryptocurrency sector with robust investor protections, thereby solidifying New York’s role in shaping the future of financial technology and regulation.

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