New York State Department of Financial Services (NYDFS) specified new requirements for virtual currency businesses in the state on September 18.
According to the Wall Street Journal, the new rules primarily focus on the delisting of cryptocurrencies. NYDFS Chairman Adrienne Harris stated:
“When we realize that a coin someone once thought was suitable is no longer so, and when we see that new risks have emerged or the coin is being misused, we want our companies to find a way to delist this coin while protecting consumers and ensuring safety and soundness.”
According to NYDFS’s statement, the proposed rules expand the original guidance first published in 2020. These rules allow crypto firms to establish policies on accepting and listing new cryptocurrencies.
These rules also permit “green-listed” cryptocurrencies that companies can list without formulating a policy or obtaining prior approval from the NYDFS. The agency’s green list currently includes Bitcoin (BTC), Ethereum (ETH), and the recently announced PayPal Dollar (PYUSD) among six stablecoins.
A significant portion of the new guidance is related to the delisting requirements explained by Harris. Although these regulations allow companies to establish their own policies, all companies, including those without a listing policy, are required to have a delisting policy.
The new rules also include heightened risk assessment standards for coin listing policies and more significant requirements for retail products and services. The NYDFS is accepting public comments on this proposal until October 20, 2023. It’s observed that the new rules related to green-listed tokens are also coming into effect immediately.
Strict Crypto Rules from NYDFS
It’s known that New York is quite strict regarding cryptocurrency regulations. All crypto companies operating or serving customers in the state must obtain a BitLicense or a limited-purpose trust company certificate from the NYDFS. To date, only 33 companies have obtained a combination of these licenses.
The NYDFS advised companies to segregate their corporate and non-corporate crypto assets and announced new audit fees for crypto companies. The state also enforces cryptocurrency regulations through the New York Attorney General’s office.