NYDFS Will Release Changes To Strengthen Cryptocurrency Oversight

Key Points:

• NYDFS ends self-certification for crypto firms to standardize listings and combat scams.
• Stricter regulations require the separation of corporate and user funds, transparent record-keeping, and service disclosures.
• These measures strengthen cryptocurrency oversight in New York State.

In a recent update, FOX Business reporter Eleanor Terrett revealed significant developments in cryptocurrency regulations by the New York Department of Financial Services (NYDFS). These changes aim to enhance transparency and security within the crypto industry.

Effective immediately, the NYDFS will no longer permit cryptocurrency companies operating in New York State to self-certify the adoption and listing of new tokens. This decision marks a crucial shift in policy to ensure that all BitLicense and Limited Purpose Trust Companies (LPTC) adhere to uniform DFS-approved listing standards. The move comes as a response to growing concerns about scams and inconsistencies within the industry.

Moreover, the NYDFS is set to introduce more stringent regulations in the cryptocurrency sector, as disclosed by Eleanor Terrett. Revised policies for coin listings are expected to be released soon, with the potential to significantly impact crypto companies operating in the state.

Earlier this year, NYDFS superintendent Adrienne Harris emphasized the need for cryptocurrency companies and exchanges with BitLicenses to segregate corporate funds from users’ virtual currency holdings, both on-chain and within the company’s internal ledger accounts. The regulator is adamant that crypto firms should only hold user funds for the exclusive purpose of custody and safekeeping services.

Furthermore, the NYDFS is imposing additional requirements, obligating all licensed businesses that custody assets to maintain proper records and provide comprehensive information about their services to customers through transparent terms and conditions.

These measures are seen as a crucial step toward establishing a more secure and regulated cryptocurrency environment in New York.

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