The New York State Department of Financial Services (NYDFS) has unveiled a set of proposed guidelines aimed at increasing transparency in the cryptocurrency industry. The proposed rules are intended to regulate how cryptocurrency companies list and delist coins on their platforms. The guidance, published on Monday, outlines the expectations and procedures that crypto firms should follow when evaluating and deciding to list or delist a cryptocurrency.
NYDFS Superintendent Adrienne Harris emphasized the need for these guidelines, stating that they are designed to create more robust standards for coin offerings. The NYDFS had identified deficiencies in current practices through examinations, and these new rules aim to address those issues.
One significant aspect of the proposed framework is the requirement for cryptocurrency companies to develop firm-specific coin listing and delisting policies. These policies should cover various aspects, including governance for the coin-listing process, risk assessments of coins, and procedures to monitor coins. The goal is to ensure that crypto companies have clear and comprehensive policies in place to guide their listing and delisting decisions.
The delisting framework also introduces measures for how firms should handle the delisting process. This includes specifying the events that could trigger a coin’s removal, creating execution plans that include advance notice to customers, and conducting impact analyses. These provisions are meant to protect consumers and maintain the safety and soundness of the cryptocurrency market.
One significant change in the proposed rules is the elimination of self-certification for listing new tokens. Previously, crypto firms could self-certify a listing without seeking approval from NYDFS. However, under the new framework, crypto companies will need to obtain NYDFS’s approval for their delisting policies before listing any coins. This change is intended to prevent scams and unscrupulous practices by ensuring that regulators have oversight over the listing process.
The NYDFS has also made revisions to its greenlist, which is a list of cryptocurrencies that can be listed by companies without prior approval from the regulator. The updated greenlist includes Bitcoin (BTC), Ethereum (ETH), Gemini Dollars (GUSD), and the PayPal dollar. Crypto companies will now need NYDFS approval for their delisting policies before listing any coins on the greenlist.
The NYDFS has been taking a proactive approach to regulating the cryptocurrency industry in New York. Superintendent Adrienne Harris has led the department in levying substantial fines against crypto companies, including Coinbase and Robinhood’s crypto unit, totaling $132 million. The agency has also overseen the closure of Signature Bank in response to the crypto market’s volatility.
The proposed guidelines are open for public comment until October 20, allowing stakeholders and the public to provide feedback on these new regulations. The NYDFS’s move to establish clearer and more transparent rules for listing and delisting cryptocurrencies reflects its commitment to ensuring the safety and integrity of the cryptocurrency market in New York.