The financial regulator of New York has implemented stricter guidelines for companies that list and delist cryptocurrencies to safeguard investors.
On Nov. 15, the New York State Department of Financial Services (NYDFS) introduced new regulations requiring crypto companies to submit their policies regarding the listing and delisting of their coins for approval by the NYDFS.
However, company policies will be evaluated under more stringent risk assessment criteria established by the NYDFS to secure investors.
The NYDFS evaluates various aspects of the tokens, including technological, operational, cybersecurity, market, liquidity, and illicit activity risks.
Additionally, all digital currency business entities licensed under the New York Codes, Rules, and Regulations or limited purpose trust companies authorized under the state’s Banking Law are subject to the forthcoming modifications.
In September, the NYDFS initially requested public input on the proposal.
NEW: DFS Superintendent Adrienne A. Harris Adopts New Regulatory Guidance Regarding the Listing of Virtual Currencies
All affected companies must convene with the NYDFS by Dec. 8, 2023, to review their preliminary coin listing and delisting policies before submission on Jan. 31, 2024.
The financial regulator will employ an “innovative and data-driven approach” to supervise coin listings, delistings, and the crypto market, according to Superintendent of Financial Services Adrienne A. Harris.
Harris emphasized that the new regulation does not constitute a state-wide crackdown on the cryptocurrency industry:
“[We want] to ensure that New Yorkers have a well-regulated way to access the virtual currency marketplace and that New York remains at the center of technological innovation and forward-looking regulation.”
Moreover, the NYDFS announced in February that it had enhanced its capacity to detect illicit activities associated with cryptocurrencies, including insider trading and market manipulation.
New York is home to approximately 690 blockchain-based enterprises, and 19% of New Yorkers own cryptocurrencies, according to a Coinbase report from August.