New Virtual Currency Regulations Issued by NYDFS
The New York Department of Financial Services (NYDFS) has released updated standards for virtual currency listings and delistings. These regulations apply to virtual currency entities (VCEs), including Bitlicensees and limited-purpose trust companies. The new guidelines cover various aspects such as coin-listing policies, governance requirements, risk assessment expectations, and coin delisting requirements.
VCE Coin-Listing Policies
VCEs must now obtain NYDFS approval for both their coin-listing and coin-delisting policies before self-certifying any coins. Without NYDFS-approved listing policies, VCEs are limited to listing coins on the NYDFS Greenlist. The NYDFS can also require VCEs to delist coins or restrict access for New Yorkers to non-Greenlist coins.
Coin-Listing Governance Requirements
VCEs are required to involve their board of directors or governing authority in overseeing coin-listings. They must manage conflicts of interest, maintain compliant recordkeeping, and notify NYDFS of any changes or non-compliance. The governance authority must annually reassess the coin-listing policy and ensure independence from listing proposals.
Coin-Listing Risk Assessment Requirements
VCEs must assess specific risks such as technical design, cybersecurity, market and liquidity, legal, and reputational risks. They must also mitigate conflicts of interest and ensure fair treatment of customers. VCEs are prohibited from self-certifying coins that circumvent laws or conceal identities.
VCE Coin Monitoring
VCEs must have robust monitoring policies for self-certified coins, including annual re-evaluations and compliance with anti-money laundering controls. They are expected to adhere to NYDFS guidance on blockchain analytics.
VCE Coin Delisting Requirements
VCEs must be prepared to discontinue support for coins presenting elevated risks. Coin-delisting policies must be comprehensive, reflecting the VCE’s business model and other factors. VCEs must obtain approval for delisting policies, provide notice to NYDFS before delisting, and make timely disclosures to customers.
Hot Take: NYDFS Releases New Regulations for Virtual Currency Listings and Delistings
The NYDFS has implemented updated standards for virtual currency listings and delistings. These regulations aim to enhance governance, risk assessment, and monitoring practices among virtual currency entities. The guidelines require VCEs to obtain NYDFS approval for coin-listing and delisting policies, assess specific risks, and maintain compliance with anti-money laundering controls. VCEs must also have comprehensive delisting policies and ensure transparency in their decision-making processes. The new regulations demonstrate the NYDFS’s commitment to maintaining high standards of regulatory compliance and protecting customers in the virtual currency space.
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