The New York Department of Financial Services (NYDFS) is set to refine its guidelines for the listing and delisting tokens. To bolster transparency in the cryptocurrency market, the NYDFS, the regulatory authority responsible for overseeing financial services and products offered by firms operating within New York State, is on the verge of issuing updated directives for cryptocurrency companies.
Stricter Listing and Delisting Regulations on the Horizon
Modifications in the standards for including and excluding cryptocurrencies are anticipated to be rolled out. The NYDFS is also encouraging companies involved in virtual currencies to present revised regulations to enhance transparency within the cryptocurrency market.
These regulatory adjustments are expected to reduce the risk of fraudulent token listings and safeguard user funds. It is relatively uncommon for cryptocurrency assets to be deceptively listed or delisted. Still, incidents like the abrupt removal of the BALD token from exchanges in early August have underscored the need for increased vigilance.
Mandatory Submission of Listing and Delisting Procedures
The NYDFS has requested that cryptocurrency exchanges provide details of their procedures for listing and delisting tokens. Recent instances of tokens being added to exchanges and later revealed as scams have not escaped the NYDFS’s notice. Consequently, the authority outlines specific requirements for cryptocurrency businesses. They urge them to strengthen their token evaluation criteria before introducing them on their platforms.
Comprehensive Rules for Token Delisting from The New York Department of Financial Services
NYDFS’s recommendations will establish the first comprehensive set of rules for token delisting. NYDFS Commissioner Adrienne Harris emphasized the importance of having mechanisms to delist a cryptocurrency if new risks emerge or the coin is exploited, all while safeguarding consumers and financial stability.
Three-Pronged Approach to Listing Policies
The regulator mandates that companies present draft listing policies based on governance, risk assessment, and methods employed to monitor tokens, representing a three-pronged approach. Moreover, once a virtual asset company meets the prescribed qualifications, it must self-certify a listing and provide written notification to the NYDFS.
Creating a “Greenlist” of Approved Assets
NYDFS plans to establish a “greenlist” of assets that companies can list and delist. These guidelines encompass not only token listings but also custody services for cryptocurrencies. The deadline for public comments on the proposed regulatory changes has been extended until October 20. This will provide stakeholders additional time to voice their opinions and concerns.