New York’s Department of Financial Services (NYDFS) has recently updated its crypto exchange regulations. This pivotal change halts the practice of self-certification for new coins and tokens.
Entities like Circle and Gemini must now pause new coin certifications. They cannot proceed until they comply with the new standards set by NYDFS.
New York Restricts New Crypto Listings
Given New York’s role as the US financial hub, its regulatory decisions often influence national trends. This is especially true in financial regulation. The updated guidelines from NYDFS are expected to have broad implications and could affect how crypto is traded and regulated across the country.
Under the new rules, regulated entities must submit two policies for approval. One policy should outline the process for listing coins and tokens. The other should detail the delisting process.
According to the NYDFS industry letter,
“VC Entities with a previously approved coin-listing policy under the Prior Guidance are not permitted to self-certify any coins until they submit to and receive approval from the Department a coin-listing policy that meets the standards.”
These guidelines are detailed and specific. They require exchanges and service providers to evaluate factors like token technology, use cases, and safety. They also demand clear oversight roles for their governing authorities, typically boards of directors. These bodies must approve and periodically review these policies.
Read more: Top 7 Crypto Exchanges With the Lowest Spreads in 2023
Coin Listings and Delistings
The NYDFS has set strict criteria for coin listings. For example, stablecoins are only permissible if listed on the state’s greenlist. Currently, this list includes just eight coins, six of which are stablecoins.
NYDFS explicitly disallows tokens associated with other exchanges or bridged from their native chain. Also barred are tokens where the circulating supply is less than 35% of the total supply.
The guidelines also cover the process of delisting a coin. Exchanges must give customers adequate notice before suspending trading, and they must also inform the firm’s governing body. The NYDFS retains the right to order the delisting of an asset, and it warned that firms must be prepared for such an event.
NYDFS Superintendent Adrienne Harris said,
“When we know that a coin that someone once thought was OK, when we see that new risks have emerged or the coin is being misused, we want our entities to have a way to delist the coin in a way that’s still protective of consumers and protects safety and soundness as well.”
These updates are part of NYDFS’s initiative to improve transparency in cryptocurrency trading. The goal is to protect newcomers to the cryptocurrency market from scam tokens. All in all, this move underscores the NYDFS’s commitment to consumer safety and a stable financial environment.
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