New York Financial Regulator Strengthens Crypto Listing Guidelines

According to the state's financial regulator, guidelines for companies listing and listing cryptocurrencies in New York have been strengthened to better protect investors.

The New York State Department of Financial Services (NYDFS) announced new restrictions on November 15 requiring crypto companies to submit their coin listings and listing policies to the NYDFS for approval.

Company policies are measured against more stringent risk assessment standards set by the NYDFS to protect investors. Among the issues to be considered by the NYDFS are technological, operational, cyber security, market, liquidity and illicit activity risks.

The upcoming changes will apply to all digital currency businesses licensed under New York codes, rules and regulations or limited trust companies under the state's banking law. NYDFS first solicited public comment on the proposal in September.

New: DFS Superintendent Adrian A. Harris approves new regulatory directive regarding listing of virtual currencies.

More here: pic.twitter.com/p5kfXfUVnO

— NYDFS (@NYDFS) November 15, 2023

Cryptocurrency companies that already have an approved coin listing policy are not allowed to self-verify any tokens until they submit to the NYDFS and receive verification.

Firms that must comply with the new rules include stablecoin issuer Circle, crypto exchange Gemini, fund manager Fidelity, trading house Robinhood and payments giant PayPal.

All affected companies should contact the NYDFS by December 8, 2023 to review their draft coin list and detailed policies and by January 31, 2024.

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Superintendent of Financial Services Adrian A. Harris said the financial regulator will apply an “innovative and data-driven approach” to coin listings, listings and broader regulation of the cryptocurrency market.

Harris stressed that the new law is not part of a state-wide crackdown on the cryptocurrency industry.

“[We want] To ensure New Yorkers have a well-regulated way to access the virtual currency marketplace and ensure New York is at the center of technological innovation and forward-looking regulation.

In February, the NYDFS said it had expanded its ability to detect illegal activities related to cryptocurrencies, such as insider trading and market manipulation.

About 690 blockchain-based companies are based in New York, and 19% of New Yorkers own cryptocurrency, according to a report released by Coinbase in August.

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