The New York State Department of Financial Services, the Bitlicense regulator, has published a proposed framework for licensed companies seeking to list new coins. This is the first time the regulator has proposed changes to its crypto regulation in five years. Among the changes, licensees will be able to self-certify the compliance of their new coins without having to obtain prior approval from the regulator.
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First Regulatory Changes in 5 Years
The New York State Department of Financial Services (DFS) published “proposed guidance regarding the adoption or listing of virtual currencies” on Wednesday. “To provide regulatory clarity and efficiency, and to ensure that our approach to regulating virtual currency businesses reflects the realities of an evolving market,” the DFS announced:
We are reviewing our virtual currency regulations and the manner in which they are implemented.
The department started regulating the crypto industry in July 2014. So far, two dozen Bitlicenses or trust charters have been granted to crypto companies to operate in the state of New York. The regulator explained that some of its licensees have asked to list new coins in addition to those listed in their initial applications with the DFS. The department is now seeking comments from all interested parties and the general public regarding two proposed coin adoption or listing options it wants to make available to licensees. Comments should be submitted by Jan. 27, 2020.
The Proposed Framework
Firstly, the DFS proposes creating a webpage listing all of the coins it has pre-approved for all licensees to list without having to obtain prior approval. The list “may be updated from time to time, as long as such listed coins have not been subject to any modification, division, or change after their listing on the DFS web-page,” the regulator detailed, adding:
Coins currently contemplated for the list include bitcoin, bitcoin cash, ether, ether classic, litecoin, ripple, paxos standard, and Gemini dollar.
Secondly, the regulator is proposing a framework that allows the listing policy to be tailored to a licensee’s specific business model and risk profile to create a firm-specific listing policy. The DFS clarified:
Upon approval, the company may self-certify the listing of new coins on an ongoing basis, consistent with the company’s approved policy, with prior notice to the department and without the need for prior approval.
The DFS reiterated that licensees that do not have DFS-approved company coin-listing policies are required to seek its prior approval in order to offer coins that are not on its approved list. Furthermore, all licensees “are required to keep DFS informed, no later than at the time of their next quarterly filing, of all coins to be used or offered in connection with their Virtual Currency Business Activities.”
A licensee’s coin-listing policy “should consist of robust procedures that comprehensively address all steps involved in the review and approval of virtual currencies in connection with the Virtual Currency Business Activities of the licensee,” the DFS described. The policy must be tailored to the licensee’s “specific business model, operations, customers and counterparties, geographies of operations, service providers, and the use, purpose and specific features of the coins being considered. It should also include procedures for notifying DFS of new coin listings.”
What do you think of the New York regulator’s proposed coin listing policy? Let us know in the comments section below.
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