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- New York’s financial regulator is urging crypto companies regulated in the state to provide more transparency on how they list and delist cryptocurrencies.
- The proposed framework is designed to guide firms in designing their own private coin listing and delisting policies.
- Once a firm receives approval from the regulator for its coin listing policy, they can notify the New York Department of Financial Services (NYDFS) in writing before using a coin.
New York’s financial regulator is demanding more transparency from crypto companies regarding their crypto listing & delisting policies.
New York Financial Regulator Seeks Transparency
New York’s financial regulator is urging crypto companies regulated in the state to provide more transparency on how they list and delist cryptocurrencies. In the proposed guidance set to be released on Monday, the New York State Department of Financial Services (NYDFS) outlines its expectations for how crypto firms evaluate coin offerings before acceptance, based on a previous version of the framework.
The regulator also details the steps and criteria a crypto company should consider when deciding to delist a coin. The proposed framework is designed to guide firms in designing their own private coin listing and delisting policies.
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NYDFS Inspector Adrienne Harris said that guidance was needed to make standards around coin offerings stronger and that updates came from findings through examinations. She also noted that the new guidance would be the first one regarding delisting. Harris stated:
“When we know that what we once thought was good, we now see new risks or we see misuse of the coin, we want our institutions to have a way to delist the coin in a way that still protects consumers. It also preserves safety and soundness.”
As part of the proposed framework, NYDFS is asking cryptocurrency companies registered in the state to provide new coin listing and delisting policies. The proposed legislation will be open for public comment until October 20.
What’s in the proposed new framework?
The new framework asks crypto firms to design their coin listing policies in three areas: the management of the coin listing process, risk assessments for coins, and procedures for monitoring coins.
The proposed delisting framework asks firms to detail how they decide to delist a coin, what types of events can trigger a delisting, and procedures for notifying and conducting an impact analysis on customers.
The proposed frameworks coincide with a period during which Harris, using her role regulating New York’s leading insurance and banking sectors, has tried to set the national regulatory agenda for crypto over two years.
Under Harris’s leadership, the NYDFS has imposed $132 million in penalties on crypto firms, including Coinbase and online trading platform Robinhood’s crypto unit.
Additionally, the NYDFS examined Signature Bank’s closure in March when there was turmoil in the crypto market. It is estimated that there are around $4 billion in deposits related to Signature Bank’s digital asset banking business. Harris concluded:
“We are still continuing to do risk-based analysis of the exams, making sure assets are being appropriately custodied. And, of course, we’ll continue to bring enforcement actions when we need to.”
Harris noted that her agency now has approximately 60 personnel dedicated to crypto, almost three times the size it was two years ago.