The New York Department of Financial Services (NYDFS) has recently unveiled a comprehensive set of guidelines aimed at enhancing consumer protection and promoting transparency in the city’s crypto landscape. These proposed measures seek to ensure that crypto platforms operating in New York adhere to strict regulatory standards.

Under the newly introduced rules, licensed entities are required to notify the NYDFS when listing or delisting a cryptocurrency. Moreover, these entities must submit their listing and delisting policies to the department for review and approval. In an effort to maintain regulatory compliance, crypto entities are prohibited from self-certifying a crypto asset for trading until they have obtained regulatory approval for their policies.

The NYDFS emphasizes the importance of proper record-keeping by crypto platforms, allowing authorities to access relevant information when necessary. By imposing these regulations, the financial department aims to enhance consumer protection and assess risks pertaining to operational processes, technology, illicit activities, tokens, liquidity, and the market.

Existing crypto entities in New York City are required to submit their draft listing and delisting policies to the NYDFS by December 8. The final versions must be submitted by January 1, 2024. These regulations apply to all crypto businesses approved under New York Codes and Rules and Regulations, including limited-purpose companies operating under the state’s Bank Law.

It is important to note that the new regulations prohibit the listing of native tokens from exchanges such as FTX’s FTT and Binance’s BNB. Additionally, bridged tokens originating from native chains are explicitly disallowed.

Regarding stablecoin listings on crypto exchanges, the NYDFS permits only those included in the state’s greenlist. Currently, the greenlist comprises eight coins, of which six are stablecoins. Any stablecoin not listed on the greenlist requires written approval from the Department of Financial Services (DFS) before it can be listed.

Furthermore, the proposed regulations stipulate that crypto assets with less than 35% circulating supply of the total supply cannot be listed. Regulated crypto entities in New York must adhere to these updated guidelines, effective immediately.

Adrienne A. Harris, Superintendent of Financial Services, assures that the implementation of these new rules does not signify a crackdown by the state. Rather, they are intended to uphold user protection and position New York as a hub of technological innovation under a well-regulated crypto market.

The NYDFS’s commitment to fostering a secure and transparent crypto ecosystem in New York is evident in its proactive approach to safeguarding consumer interests and advancing forward-looking regulations. These proposed guidelines serve to instill confidence in the crypto industry while facilitating its growth in the state.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.