New Regulations Tighten Rules for Licensed Cryptocurrency Companies in New York
Date: 2023-11-17 Author: Dima Zakharov Categories: IN WORLD
Strengthened Oversight for Cryptocurrency Companies
The NYDFS has rolled out a set of new rules impacting licensed cryptocurrency entities operating in New York. These regulations mandate companies dealing with digital currencies to align their listing and exclusion policies with the state's financial rules and regulations. The objective is to elevate investor protection by scrutinizing the risks associated with the placement of digital assets on trading platforms.
Stringent Evaluation Criteria
Under these guidelines, the regulatory body plans to assess various risks tied to the trading of digital assets on cryptocurrency exchanges with stricter standards. This evaluation encompasses technological, operational, and market risks, emphasizing potential threats to cybersecurity, liquidity, and the likelihood of illicit activities on these platforms.
Implications and Compliance
The regulations extend their reach to all organizations holding licenses under New York state's rules, including those falling under the New York Banking Law. Notably, cryptocurrency firms with pre-approved asset listing policies are no longer authorized to independently certify any crypto assets without prior approval from NYDFS.
Companies Affected by the Changes
Several prominent entities such as USDC Circle, Gemini cryptocurrency exchange, Fidelity Investments, Robinhood, and PayPal are among those obligated to adhere to these revised regulations.
Compliance Deadlines
All cryptocurrency firms must engage with NYDFS before December 8, 2023, to discuss their listing and exclusion policies. Additionally, they are required to furnish the necessary information to the regulatory body by January 31, 2024.
Regulatory Intentions
Adrienne A. Harris, the Superintendent of NYDFS, emphasized that these measures aim to ensure New York residents have access to a well-regulated virtual currency market. She highlighted the innovative approach taken for overseeing cryptocurrency listing and delisting. The intent behind these rules is not to stifle the crypto industry but to maintain New York's position as a hub for technological innovation.
Recap and Earlier Actions
Previously, in September, the financial regulator had reduced the number of pre-approved cryptocurrencies permitted for trading and storage on licensed platforms. Cryptocurrencies such as XRP, DOGE, LTC, and ETC were removed from the list.
This move underscores a continued effort by regulatory authorities to bolster oversight and protect investors within the cryptocurrency space operating under New York's jurisdiction.
