According to the consultation proposed by NYDFS Superintendent Adrienne A. Harris, licensees will potentially need to access all risks of any new coins – plus detail how they would reverse the process of de-listing a crypto.
The new framework requests firms to draft their coin-listing policy in three areas: governance for the coin-listing process; risk assessments of coins; and procedures to monitor coins.
The framework also asks firms to describe how they decide to de-list a crypto, including the kinds of events that could spark a removal, along with execution strategies, such as customer notice and impact analysis.
The proposed framework come as Harris marks two years as New York’s leading financial regulator. NYDFS has been looking to use the state’s good reputation for regulating insurance and banking to also help implement transparency for crypto.
Under Harris, NYDFS has processed $132million in fines against crypto firms, including Coinbase and Robinhood.
In a statement, Harris said: “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.
“In less than two years, we’ve built our team to over sixty experienced professionals, created and enhanced consumer and industry safeguards, and engaged with policymakers around the world – including with the U.S. Congress to help ensure there is a federal prudential regulator to supervise the industry.”
Last April, the regulator made clear how crypto companies will be vetted for money laundering and cybersecurity standards.
As part of this latest move, the regulator also updated its list of approved cryptos that firms can list or custody without further regulation. The greenlisted coins include Bitcoin (BTC), Ethereum (ETH), and stablecoins issued by Gemini and PayPal.
The proposed guidance is open for public comment until 20 October.