NYDFS Unveils Stricter Crypto Listing Rules For Investor Protection
Release: 2023/11/16 16:31 Reading: 863
The New York State Department of Financial Services (NYDFS) announced strict guidelines for virtual currency listing and de-listing. In a fresh industry letter released on November 15, the NYDFS clarified that they are issuing fresh and stricter rules for all Virtual Currency Business Entities.
The revised content would be: The updated guidelines for listing and de-listing will be applicable to companies that are licensed under 23 NYCRR Part 200 or chartered as Limited Purpose Trust Companies under the New York Banking Law.
Adrienne A. Harris, Superintendent of Financial Services, stated that this action will enhance safeguards for cryptocurrency investors across the state.
The Framework of New Guidelines
According to the latest guidelines, virtual coin entities must take into account important factors such as business model considerations. The Guidance also includes risk-based considerations, which involve providing increased protections for retail consumers. This can be achieved by prohibiting certain characteristics of virtual currencies from being self-certified for retail consumers' use in any virtual currency business activity.
The entities should plan and work on risk assessment expectations, which will help to have transparency and more clarity of the risk assessment expectations. It will not only reduce regulatory uncertainty but also ensure compliance for a better experience in the cryptocurrency industry.
The guidelines also include advance notification requirements, which commenters pointed out may not always be practical for coin-delistings and could unintentionally harm consumers. The most recent guideline now allows for some exceptions to the advance notification requirements in urgent situations.
Furthermore, they requested more precise definitions, specifically requesting updated definitions of certain terms and conditions to guarantee a secure process for listing and de-listing tokens for customers.
Additionally, the updated regulations also necessitate that companies provide prior notice for token de-listings and enhance transparency in informing their customers about discontinuing support for previously listed cryptocurrencies.
Also Read: SOL Price Shoots Past $65 After Cathie Wood Backs Solana Over Ethereum, Next $100?
Fresh NYDFS Virtual Currency Guidelines & Purpose
According to the recently released circular for cryptocurrency entities, companies are required to submit their policies on listing and delisting coins for approval by NYDFS. Additionally, these crypto firms must also provide their policies for evaluation against stricter risk assessment standards, which will help prevent delistings. This initiative aims to improve security and reduce disruptions and market risks in the ever-changing cryptocurrency market.
The proposed updates to the current regulations are being implemented with the intention of enhancing the supervision of digital currencies for cryptocurrency enthusiasts.
Furthermore, it is essential for all Virtual Coin entities to collaborate with the NY Department in order to facilitate development. By January 31, 2024, these entities must present a coin-delisting policy to NYDFS for official endorsement. Additionally, VC Entities must schedule a meeting with the department before December 8, 2023, to engage in discussions regarding their preliminary coin-delisting policy.
Also Read: Crypto Market Rallies As BTC, Pepe Coin, RNDR Surge
The post NYDFS Unveils Stricter Crypto Listing Rules For Investor Protection appeared first on CoinGape.
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