NYDFS Strengthens Crypto Rules with Zeal Wallet Launch

The New York State Department of Financial Services (NYDFS) has revamped its criteria for cryptocurrency listing and delisting, prioritizing investor protection and enforcing elevated regulatory benchmarks. Since 2015, NYDFS has been a key regulator, introducing BitLicenses and trust company charters. In 2020, initial guidance on virtual currency adoption emerged.

In a swift move, NYDFS has replaced its 2020 guidelines, now demanding more stringent prerequisites. The updated directives focus on enhancing consumer protection and refining risk assessment procedures to streamline regulatory processes. Noteworthy are exceptions for advance notifications during specific coin delistings and clarified definitions.

Entities engaged in virtual currency activities must secure DFS approval for coin-listing policies, maintain thorough records, and engage in ongoing communication. A pivotal aspect is the formulation of comprehensive coin-delisting policies, to be submitted for review by January 31, 2024, with draft policies due by December 8, 2023.

These regulations will impact licensed digital currency businesses in New York, marking NYDFS's commitment to regulating the dynamic virtual currency market.

The NYDFS’s move aligns with broader investor protection goals. Companies like Circle, Gemini, Fidelity, Robinhood, and PayPal are bound by these regulations, underscoring New York's vigilant oversight of the cryptocurrency industry.