According to proposed amended rules released by the regulator on Monday, crypto coin listings will be subject to stricter regulations from the New York Department of Financial Services, especially if they target retail clients.
According to the consultation, which was suggested by NYDFS Superintendent Adrienne Harris, licensees would be required to evaluate the legal, reputational, and market risks of any new coinage and would also be required to specify how they would reverse the process by de-listing a token.
In a statement, Harris cited a team of more than 60 employees and more than $132 million in fines levied on virtual currency companies. “Since joining DFS, I have made it a priority to ensure the Department’s regulatory and operational capabilities keep pace with industry developments to protect consumers and markets,” Harris said.
The regulator laid out in April how cryptocurrency firms will be scrutinised for compliance with money laundering and cybersecurity standards. The regulator has already penalised firms like Coinbase and Robinhood.
The regulator also amended its list of “greenlisted coins” as part of the September action, which now includes stablecoins issued by PayPal and Gemini as well as bitcoin (BTC) and ether (ETH), which licensees can list or custody without facing further regulatory restrictions.
While some have applauded the regulatory clarity in New York, which was a U.S. pioneer in regulating cryptocurrency, others, like Kraken, have withdrawn in protest.