The New York State Department of Financial Services (NYDFS) has published a set of new rules guiding the listing and delisting of digital assets to protect investors from financial harm caused by the activities of crypto firms.
According to an official post from the department, the new guidance is effective immediately and will replace older standards issued in 2020. All virtual asset firms are expected to incorporate the latest standards in their coin listing and delisting policies by December 8.
NYDFS publishes new guidance on crypto assets
NYDFS released proposed updates to prior guidance to the public for comments in September. During the comment period, the agency received submissions from numerous crypto entities, advisory firms, industry groups, and the general public. The department also contacted crypto firms to identify areas that needed more clarity.
Commenters identified several areas for consideration in creating the new standard. Some were of the opinion that the risk associated with digital assets partly depends on the nature of the crypto firm’s business activities. A good number sought clarity on risk assessment requirements to reduce regulatory uncertainty and ensure compliance. Others encouraged feasible notification requirements for coin delisting to prevent unintended losses.
Due to the feedback received, the NYDFS updated guidance to include risk-based considerations, clearer risk assessment standards, tailored risk assessment requirements for specific crypto business activities, and limited exceptions to advance notification requirements for significant circumstances.
Companies need to update policies
According to the new rules, crypto companies with previously approved coin listing and delisting policies can no longer self-certify coins unless they incorporate the new guidance and receive new approval from the NYDFS.
“Following DFS approval of the coin-listing policy, a VC entity can proceed with self-certification of the coins, making them available for approved virtual currency trading activity in New York or to New York residents. The Department will not approve a coin-listing policy that does not include a coin-expanded policy,” the department said.
Crypto entities without DFS-approved coin listing policies can only list assets included on the agency’s greenlist. They are subject to instructions from the department to delist any coins that are not on the green list but may be approved by the agency as a significant change in business.
Meanwhile, the NYDFS has asked all crypto firms to submit their final coin delisting policies for approval by January 31, 2024.
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