New York State’s financial watchdog has updated its rules for listing/delisting virtual currency.
The New York State Department of Financial Services (NYDFS) on Wednesday (Nov. 15) issued guidance that enhances requirements for listing and listing virtual currencies regulated by the department.
According to a department news release, Wednesday’s move updates a previous framework issued by the NYDFS three years ago.
“This guidance continues the department’s commitment to an innovative and data-driven approach to virtual currency oversight, keeping pace with industry developments,” said NYDFS Superintendent Adrienne A. Harris.
“DFS is consistently at the forefront of virtual currency regulation, translating years of knowledge and experience into timely and relevant guidance which protects consumers and markets,” she added.
The NYDFS said the guidance strengthens risk assessment standards for coin-listing policies and enhances rules for retail consumer-facing businesses.
In addition, the guidance requires licensees to develop a coin-delisting policy that complies with this guidance “to ensure that, in the event a coin must be delisted, it can be done in an orderly way that protects consumers and minimizes market disruption,” the NYDFS said.
The news comes at a time when a record number of digital tokens have been delisted from platforms like Coinbase and Binance.
A report last month by Bloomberg News, citing data from Kaiko, said at least 3,445 tokens or trading pairs have been delisted or inactive long enough that it’s likely they’ll be dropped. That figure is 15% higher than for all of 2022, and double the amount delisted in 2021.
Meanwhile, a separate research firm, CCData, said Binance and Coinbase have delisted upwards of 100 tokens just in October. Eighty of them were pulled from Coinbase, more than any month this year and since at least 2021.
According to the Bloomberg report, many exchanges have tried to consolidate liquidity among trading pairs that are more popular with customers in the wake of crypto sector upheaval.
Wednesday’s guidance is part of the NYDFS’ VOLT initiative, designed to solidify the department’s role as a leading regulator of virtual currency in the nation.
“In less than two years, we’ve built our team to over 60 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,” Harris said earlier this year.