New York regulator hunts crypto and AI specialist for policy unit

(Coin Telegraph)-14/08/2024

The New York State Department of Financial Services (NYSDFS) is seeking a specialist to help develop policies on cryptocurrencies, decentralized finance (DeFi) and artificial intelligence, among other related fields. 

The New York financial regulator is seeking candidates for a position within its Innovation Policy Unit, who will be specially tasked with tackling “cutting-edge policy issues” in the broader financial services landscape.

According to the job posting, the policy specialist is expected to help resolve policy issues in traditional markets, crypto and DeFi, as well as the use of AI and machine learning in financial markets.

NYSDFS continues to fine-tune BitLicense requirement 

The NYSDFS introduced the BitLicense, New York’s business license for cryptocurrency use, in August 2015.

Since then, it has actively updated it to ensure ongoing oversight of crypto exchanges and service providers. At the time, major crypto firms, including Bitfinex, Kraken and Paxful, departed the state due to noncompliance.

Furthermore, the NYSDFS unveiled new restrictions on Nov. 15, which mandate crypto companies to submit their coin listing and delisting policies for NYSDFS approval. Technological, operational, cybersecurity, market, liquidity and illicit activity risks of the tokens are among the factors to be considered by the NYSDFS.

In January, the New York State Comptroller Thomas DiNapoli raised concerns about NYSDFS’ management of BitLicense.

DiNapoli pointed out a lack of thoroughness regarding a range of security checks of the potential licensees, which included several incomplete fingerprinting processes before application approval.

Holes in New York’s crypto licensing requirements

The NYSDFS has also failed to provide proof of verifying applicants’ tax obligations or minimum net worth documentation.

Members of the Innovation Policy Unit are required to perform qualitative and quantitative research to inform the NYSDFS decision-making around policy reviews.

On May 30, the NYSDFS established customer service standards for regulated virtual currency entities (VCEs) or crypto exchanges. At the time, Supervisor Adrienne Harris explained that recordkeeping in the form of tabulation and customer feedback must begin in the third quarter of 2024 and be accessible to the NYSDFS by Nov. 1. She added:

“This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business.”

There are currently 32 crypto exchanges registered under BitLicenses or trust charters.