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 ensure the activities of crypto firms protect investors from financial harm.
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 into their coin listing and delisting policies by December 8.
NYDFS Publishes New Guidance on Crypto Assets
The NYDFS released proposed updates to the former guidance to the public for comments in September. During the comment period, the agency received submissions from several crypto entities, advisory firms, industry groups, and the general public. The department also contacted crypto firms to identify areas that require greater clarity.
Commenters identified several areas to be considered in creating the new standards. Some had the notion that the risk associated with a digital asset partly depends on the nature of a crypto firm’s business activities. A good number sought clarity on risk assessment expectations to reduce regulatory uncertainty and ensure compliance. Others encouraged feasible notification requirements for coin delistings to prevent unintended harm.
Due to the responses received, the NYDFS included risk-based considerations, clear risk assessment standards, tailored risk assessment expectations for specific crypto business activities, and limited exceptions to advance notification requirements for pressing circumstances in the updated guidance.
Firms Required to Update Policies
Per the new rules, crypto firms with previously approved coin listing and delisting policies can no longer self-certify coins until they incorporate the new guidance and receive fresh approval from the NYDFS.
“Following DFS approval of a coin-listing policy, a VC Entity may proceed with self-certification of coins, thereby making them available for approved virtual currency business activity in New York or to New Yorkers. The Department will not approve a coin-listing policy absent an accompanying coin-delisting policy,” the department said.
Crypto entities without DFS-approved coin listing policies can only list assets included in the agency’s greenlist. They are also subject to instructions from the department to delist any coins not on the greenlist but may have been approved by the agency as a material change to business.
Meanwhile, the NYDFS has asked all crypto firms to submit their final coin delisting policies for approval by January 31, 2024.