Adrienne Harris spearheads the most extensive unit dedicated to crypto regulation
Adrienne Harris, the superintendent of the New York Department of Financial Services (NYDFS), has once again affirmed her unwavering dedication to regulating the virtual currency space in New York.
Under Harris’s guidance, the NYDFS has been at the forefront of regulatory efforts in the crypto sector. The department, led by Harris, has spent the past two years implementing a transformative initiative aimed at strengthening its oversight of virtual currencies.
This comprehensive effort includes the development of updated guidance for the adoption and listing of virtual currencies, as well as the establishment of a framework for designating coins or tokens to the DFS greenlist.
Since her appointment as superintendent in August 2021 and confirmation by the State Senate in 2022, Harris has expanded the three-person crypto unit into a team larger than an NFL football roster. According to Axios, Harris revealed during a recent policy summit hosted by the Blockchain Association in D.C that the agency’s crypto unit now consists of over 60 people.
“It’s probably the largest crypto unit anywhere in the world,” she stated.
Despite facing criticism over the years, the agency maintains that its regulatory framework for virtual currencies is designed to ensure the highest standards of safety, soundness, and consumer protection, while also fostering responsible growth in the industry.
Harris has emphasized the importance of this framework and highlighted the department’s collaboration with regulators from around the world to establish effective standards for the evolving virtual currency sector.
Furthermore, Harris has expressed her commitment to further expanding the team, stating that they are actively working to strengthen crypto regulation in the state.
The DFS has issued eight pieces of regulatory guidance, covering topics such as stablecoins, market manipulation, and blockchain analytics. Harris has stressed the importance of practical rules that are operationally effective, rather than merely existing on paper.
In addition, the DFS has recently modified its coin listing rules, requiring firms under New York’s BitLicense regime to establish robust self-certification processes for listings. This change eliminates the need for approval for each token listing and introduces a delisting requirement, influenced by experiences with Binance’s stablecoin BUSD.
Harris acknowledged the state’s proactive efforts in regulating stablecoins, which preceded actions taken by various regulatory agencies.
When addressing federal oversight of stablecoins and New York’s role, Harris emphasized her goal of being an impartial mediator, stating that DFS actions are non-partisan and not about taking sides.
These statements underscore the substantial involvement of the NYDFS in crypto regulation, which can be described as a transformative initiative to strengthen the department’s leading oversight in the nation’s virtual currency landscape.
Fostering investor protection has been a key focus for the NYDFS under Harris’s leadership. In November 2022, the department issued digital asset guidance to state-regulated banks, outlining the information required before engaging in virtual currency-related activities.
This guidance includes the submission of a business plan that details the proposed activity’s impact on capital, liquidity, and relevant consumer protection policies. Superintendent Harris emphasized the critical role of these policies in protecting consumer funds and maintaining the competitiveness of New York-regulated banks in the crypto space.
Additionally, the NYDFS introduced rules for licensed crypto firms issuing stablecoins, mandating reserve requirements and monthly independent audits. The goal is to ensure that stablecoins are fully backed by reserves and redeemable by investors, with specific requirements outlined for these reserves.
The NYDFS has also implemented stringent new guidelines for the listing and delisting of cryptocurrencies to enhance investor protection. Superintendent Harris emphasized the department’s commitment to adapting regulatory and operational capabilities to industry developments for the benefit of consumers and market stability.
Under the updated guidelines, crypto companies must submit their coin listing and delisting policies for NYDFS approval, subject to more rigorous risk assessment standards.
These changes apply to all digital currency business entities licensed under the New York Codes, Rules, and Regulation or limited-purpose trust companies as per the state’s Banking Law.
