The New York Department of Financial Services (NYDFS), overseeing the city’s financial ecosystem and responsible for the crypto regulations in New York, issued new guidance on crypto on Wednesday. The newly proposed measures aim to protect consumers and bring more transparency to crypto platforms operating in New York. 

The NYDFS-delivered new crypto rules mandate that licensees only list and delist a crypto coin if they notify the authority about it. Licensed entities must also submit their policies to the department on how they list and delist a crypto token.

According to the proposed regulations, crypto entities cannot self-certify a crypto asset for trading until they secure regulatory approval over their policies. 

The news release reads:

VC Entities that had 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 of Section (A) of this Guidance, and have an approved coin-delisting policy that meets the standards of Section (B) of this Guidance.

Additionally, the NYDFS requires crypto platforms to keep informational records in a way that authorities can easily access them whenever needed. The financial department has set forth the new regulation in order to achieve more consumer protection and measure risk assessment. Therefore, operational, technological, illicit activity risk, tokens, liquidity, and market are the core factors NYDFS considers while designing policies. 

Updated Crypto Regulations In New York

Crypto entities currently operating in New York City must visit the NYDFS office on December 8 with their listing and delisting policies draft. The end date to submit the final version is January 1, 2024, according to the guidance and it applies to all crypto business firms approved under New York Codes and Rules and Regulations, including limited-purpose companies under the state’s Bank Law.

Furthermore, the newly introduced regulation does not allow listing an exchange’s native token like FTX’s FTT and Binance’s BNB. Any token bridged from the native chain is explicitly disallowed. 

Regarding the stablecoin listing on crypto exchanges, the NYDFS permits listing those included in the state’s greenlist. Notably, the state’s greenlist currently has eight coins on it, and six of those are stablecoins. Listing a stablecoin not mentioned in the list will require first secure written approval from the Department of Financial Services (DFS). 

In the proposed regulation, DFS prohibits listing crypto assets having less than 35% circulating supply of the total supply. The updated guidance takes effect immediately, and regulated crypto entities in the regime must follow it. 

Speaking on the proposed crypto guidance, Adrienne A. Harris, Superintendent of Financial Services, expressed that implementation of new rules does not come as part of the state’s crackdown. Rather, it is to ensure user protection and New York having a well-regulated crypto market “at the center of technological innovation and forward-looking regulation.”