New York regulator to tighten crypto asset listing rules

regulation of cryptocurrencies
regulation of cryptocurrencies

The New York State Department of Financial Services (NYDFS) intends to implement higher standards for the listing and delisting of digital assets on trading platforms. WSJ reports this.

The regulator has introduced new guidance to help companies develop coin offering policies.

According to NYDFS Superintendent Adrienne Harris, the document is needed to establish robust rules for exchanges that protect investors. The need to update the manual arose from shortcomings discovered during recent audits of unnamed organizations, she said.

“When we see new risks or misuse of a coin, we want our companies to have the opportunity to delist an asset while still ensuring consumer protection, safety and security,” Harris added.

As part of the new rules, NYDFS is requiring state-registered cryptocurrency organizations to implement new token listing and exclusion policies. The document is open for public comment until October 20.

At the same time, firms must independently develop their own standards in three areas: management of the coin placement process, asset risk assessment and monitoring procedures.

“We continue to monitor risk-based reviews of organizations in our jurisdiction, ensure that these reviews are successful, and ensure that impacts are addressed in a timely manner. The department will, of course, continue to take enforcement action where necessary,” the statement said.

In February, the NYDFS initiated an investigation into the infrastructure company Paxos, which is the issuer of the Pax Dollar and Binance USD (BUSD) stablecoins. The department ordered the production of the latter to cease.

Paxos has stopped issuing BUSD in accordance with the regulator’s instructions, but will continue to support redemption and conversion operations until at least February 2024.

Recall that in May, the NYDFS fined the cryptocurrency exchange bitFlyer USA $1.2 million for failure to comply with state cybersecurity requirements.

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