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With the new changes to the BitLicense rules, NYDFS will allow exchanges to self-certify the listing and adoption of new tokens approved by the regulator.
The New York Department of Financial Services (NYDFS) said that it will soon introduce changes and upgrade its virtual currency license famously known as BitLicense. In the cryptocurrency community, NYDFS is well-known for already having a strict set of rules setting the highest regulatory benchmark standards.
On Wednesday, December 11, Superintendent Linda Lacewell announced that the regulator will modify rules for the approval process of new digital currencies. Under the existing set of rules, NYDFS approves new cryptocurrencies offered in New York by working individually with each cryptocurrency exchange offering them.
The regulator has now tweaked the guidance after yesterdays announcement with two specific updates:
- Any new cryptocurrency once approved by the NYDFS can be listed by any exchange operating in New York subjected to they have given prior notice to the regulator.
- NYDFS will publish a model framework for coin listings which the exchange should be following. The proposal will allow the licensee to self-certify the listing and adoption of new tokens.
NYDFS has said that it is open to receiving comments on the new guidelines by January 27, 2020.
NYDFS Aligning Rules Suitable to the New Business Model
Superintendent Linda Lacewell said that it is important for the regulator to keep up with the changes in the industry. Therefore there are working on streamlining the process while considering new business models. She said:
“It’s more than time to take another look at the virtual currency regulation given the passage of time, changes in the industry, maturation, sophistication and new business models. What tweaks and changes can we make should we make because, while it is our obligation to regulate, we only want to have enough regulation to get the job done and not a drop more.”
The new framework will look into how the exchange handles different regulatory concerns like token governance, risk and management, etc. Lacewell added:
“The idea being that you already have a license, you already have passed muster and have the controls in place, you are subject to examination by us. And we’ve approved a lot of coins since the early days so can [we] cut through the red tape and can we get to a place where responsible licensed companies can self-certify under appropriate guidance that we’re putting forward?”
This is for the first time in the last five years that NYDFS seeks to bring changes to its BitLicense. With its strict laws, the NYDFS regulator has forced exchanges like Kraken and ShapeShift to move their operations out of New York.