New York Mandates Stronger Fraud Controls for Crypto Companies


Companies offering cryptocurrency services are being encouraged by the New York State Department of Financial Services (NYDFS) to improve their fraud and market manipulation security measures.

The agency sent out new guidance for the firms, including those that carry BitLicense or money transmission. Under this new guidances, companies will be required to implement written policies evaluating “the full range of fraud-related and similar risk areas.” This should include procedures and controls put in place to protect consumers and investors against the risks, including those from market manipulation.

Virtual currency entities should also investigate fraud and wrongdoing, after which an official statement outlining a summary of the actions taken for its resolution must be released. So said the guidance, “As the cryptocurrency markets continue to evolve, DFS is directing virtual currency companies to take the necessary steps to guard against fraud, and to be extra vigilant about manipulation. By these actions, the market can evolve with strong regulatory supervision.”


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