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DFS Wants Crypto Firms to Submit Coin-Delisting Policy

Superintendent Adrienne Harris of the New York State Department of Financial Services (DFS) has unveiled new guidance on coin-listing and delisting policies. This latest development sets new industry standards and reflects the department’s proactive stance in adapting virtual currencies.

According to the official statement by the DFS, the updated guidelines introduce heightened risk assessment standards, focusing on coin-listing policies. In light of the diverse nature of the virtual currency industry, the DFS has tailored these enhanced requirements to address retail consumer-facing businesses.

One of the pivotal aspects of the guidance is the requirement for licensees to develop and submit a coin-delisting policy for DFS’ approval. This move aims to facilitate an orderly delisting process, safeguarding consumers and minimizing disruptions in the market.

Harris mentioned: “This guidance continues the Department’s commitment to an innovative and data-driven approach to virtual currency oversight, keeping pace with industry developments. DFS is at the forefront of virtual currency regulation, translating years of knowledge and experience into timely and relevant guidance which protects consumers and markets.”

Under Superintendent Harris’s leadership, the DFS has enforced over $132 million in penalties, against virtual currency companies. The regulator maintains that companies must be held accountable, with remediation measures enforced to correct any detrimental behavior.

In September, the DFS as unveiled the proposed guidance, highlighting the expectations for crypto firms regarding the evaluation and management of coin offerings. With the intention to guide cryptocurrency firms, the proposed framework details expectations for drafting firm-specific coin listing and delisting policies.

This approach aims to provide a structured and transparent process for evaluating coin offerings before adoption and establishing criteria for responsible coin delisting. Superintendent Harris said that the focus on delisting strategies underscores the regulator’s commitment to adapting to emerging risks and ensuring that market participants can act responsibly in the face of changing circumstances.

DFS Introduces Comprehensive Crypto Guidelines

Separately, the DFS issued comprehensive regulatory guidance at the beginning of the year. These guidelines mandate all crypto companies to segregate funds belonging to customers and the companies themselves. Adrienne Harris, the regulatory superintendent, emphasized that these rules are aimed at safeguarding customers.

Besides that, the guidelines focus on clarifying custody and safekeeping services, setting transparent expectations for crypto companies. The guidelines touch on sub-custody arrangements with third parties, emphasizing the need for responsible partnerships. Lastly, proper disclosure of general terms and conditions to customers is outlined, promoting transparency in business practices.

Superintendent Harris’s decision to issue guidelines comes in the wake of broader market challenges, including the collapse of major crypto players. The collapse of FTX, along with the preceding Terra Luna incident, has raised concerns about the industry’s stability.

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