More stringent New York crypto regulation could be coming
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The New York Department of Financial Services is raising the bar for exchanges listing and delisting tokens, adding to the spectre of more stringent crypto regulation coming at the state level.
Why it matters: New York's crypto licensing regime has a reputation for being amongst the most stringent — critics have said it's thwarted crypto business growth there, advocates say it could've prevented major catastrophes like FTX.
What's happening: New guidance and processes from the state on Monday detail how crypto firms are expected to evaluate coin listings before they are adopted, based on the agency's previously provided framework.
- The additional focus on token delistings would suggest NYDFS wants to institute a more orderly way for those processes to occur in light of the spate of enforcement actions that require them.
Zoom in: The new proposed guidance would apply to regulated crypto platforms in the state including Coinbase, eToro NY, Robinhood Crypto and SoFi Digital assets, as well as others regulated by the BitLicense.
- "We appreciate the chance to weigh in on this proposal — public engagement is a critical step in bringing further clarity to the entire industry," Paul Grewal, chief legal officer at Coinbase tells Axios.
What's next: The proposed guidance is open for public feedback until October 20, 2023.
- Following the comment period, DFS will review all feedback and issue final guidance; licensees are required to submit a de-listing policy by January 31, 2024.
What we're watching: Whether the new rules will allow crypto firms to be able to operate in the state, or whether it will further alienate industry proponents from setting up shop.
Go deeper: New York regulator could set world standard for crypto
Editor's note: This story was updated with comment from Coinbase and additional information throughout.
