The New York Department of Financial Services (NYDFS) issued updated regulations on November 15 regarding the offering and disposing of virtual currencies.
The department said the new guidelines build on the rules it issued on September 18. It said it received input from several entities in a subsequent comment period and is now setting out “new elevated standards.” In addition to identifying several issues, the report said the updated guidelines include clearer definitions of certain terms.
In practical terms, the guidelines state that companies that previously had an approved cryptocurrency listing policy cannot self-certify listings until they have both a listing and delisting policy approved by the regulator under the new guidelines.
The guidelines also state that companies with approved listing policies must notify NYDFS in writing of self-certified listings and maintain records.
According to the guidelines, companies that do not have an approved listing policy can list cryptocurrencies that are on the NYDFS green list. That green list includes Bitcoin (BTC), Ethereum (ETH) and six stablecoins, including PayPal USD (PYUSD).
Finally, companies must be able to safely end support for any currency if an increased risk is identified. Therefore, all companies involved should have a delisting policy, even if they do not have a delisting policy. Companies developing delisting policies must meet a draft deadline of December 8, 2023 and a final deadline of January 31, 2024.
Rules apply to companies regulated in New York
The regulations apply to the 33 entities currently regulated under the New York BitLicense or the Limited Purpose Trust Charter.
This includes virtually all cryptocurrency companies that engage in operations in New York State. The list of regulated companies includes major companies such as Bakkt, BitGo, Coinbase, Gemini, Genesis, Fidelity, PayPal, Paxos and several others.
New York’s current guidelines are known for their strict cryptocurrency regulations and do not appear to restrict the activities of the companies discussed, but do underscore the state’s strict approach to compliance.