NYDFS Tightens Regulations: Crypto Firms Must Submit Coin Listing Policies
Summary:
New York State Department of Financial Services (NYDFS) has tightened regulations for cryptocurrency firms, particularly those regarding coin listing and delisting policies. These changes aim to protect investors from various risks including technological, operational, and cybersecurity threats. Affecting all businesses licensed under the New York Codes, Rules and Regulation or state's Banking Law, the firms, including Circle, Gemini, Fidelity, Robinhood, and PayPal, are required to submit their revised policies for approval to NYDFS by January 31, 2024.
Regulations have been tightened by New York's financial regulator, New York State Department of Financial Services (NYDFS), with a view to offer a stronger layer of protection to investors. Unveiled on November 15, the new rules require cryptocurrency businesses to submit their coin listing and delisting strategies for NYDFS's approval. The Department will gauge these policies against higher standards of risk assessment to ensure investor protection, taking into account risks such as technology, operations, cybersecurity, market, liquidity, and potential illegal activities.
The revised regulations will be applicable to all digital currency enterprises licenced under the New York Codes, Rules and Regulation and limited purpose trust companies as per the state's Banking Law. In September, NYDFS had initially requested public opinion on this proposal.
It's set that cryptocurrency companies that have a pre-approved coin listing policy, should not validate any tokens until the NYDFS approves their revised policies. The businesses needing to abide by these stipulations encompass stablecoin provider Circle, crypto exchange Gemini, fund manager Fidelity, trading platform Robinhood and payment processing leader PayPal. For the purpose of reviewing draft coin listing and delisting policies, all such firms should convene with NYDFS by December 8, 2023 and must submit these by January 31, 2024.
In a comment, Superintendent of Financial Services, Adrienne A. Harris, confirmed that the financial regulator will adopt an “inventive and data-based approach” to regulate coin listings, delistings and the overarching cryptocurrency market. She noted these regulations are not part of some large-scale crackdown on the cryptocurrency industry, but an initiative “to ensure that New Yorkers have a regulated avenue to access the virtual currency market and that New York stays at the heart of tech innovation and proactive regulation.”
In February, NYDFS announced its improved capabilities for identifying illicit activities linked with cryptocurrencies, such as insider trading and market manipulation. As per an August report by Coinbase, about 690 blockchain-centric companies have their operations in New York and 19% of New Yorkers own cryptocurrency.
Published At
11/16/2023 3:26:48 AM
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