The New York Department of Financial Services (NYDFS) intends to raise standards for listing and delisting digital assets on trading platforms. The WSJ reports.
The regulator unveiled new guidance designed to help firms develop their coin-listing policies.
According to Superintendent Adrienne Harris, the document is needed to establish robust rules for exchanges that protect investors. The need to update the guidance arose from deficiencies identified during recent inspections of unnamed entities, she said.
“When we see new risks or when a coin is not used as intended, we want our companies to have the ability to delist the asset while continuing to ensure consumer protection, safety and reliability,” Harris added.
Under the new rules, NYDFS requires state-registered cryptocurrency firms to implement a new policy on listing and delisting tokens. The document is open for public comment until October 20.
At the same time, firms must develop their own standards in three areas: governance of the coin-placement process, asset-risk assessment, and monitoring procedures.
“We continue to assess organizations in our jurisdiction on a risk basis, ensure that these checks are carried out successfully, and monitor timely remediation. The agency, of course, will continue to take enforcement actions where necessary,” the statement said.
In February NYDFS initiated an investigation into the infrastructure company Paxos, which is the issuer of stablecoins Pax Dollar and Binance USD (BUSD). The department ordered to halt the latter’s issuance.
Paxos halted the issuance of BUSD in accordance with regulator’s directives, but will continue to support buyback and conversion operations at least until February 2024.
In May, the NYDFS fined the cryptocurrency exchange bitFlyer USA $1.2 million for non-compliance with the state’s cybersecurity requirements.