Crypto Companies In New York has been Mandated with Strong Fraud Controls

The New York State Department of Financial Services (NYDFS) is making Strong fraud control rules for companies which will be mandatory and for those which offer cryptocurrency services in the state.

In a Wednesday statement, the office, which several years ago developed the BitLicense regulatory framework and released new guidance for firms, including those that have been issued either a BitLicense or a money transmission by the state.

The new guidelines will be requiring those companies in order to implement written policies those judge, “the full range of fraud-related and similar risk areas,” and also the market manipulation to prove procedures and controls to safeguard consumers and investors from these risks. The guidance also mandates that virtual currency entities take steps to investigate fraud and wrongdoing, and upon the completion of a given investigation, to issue a statement reviewing the actions taken to resolve any fraud and wrongdoing.

Superintendent Maria Vullo told:

“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.”

The DFS’ new guidance which was built on New York’s BitLicense framework, which was greenlit in 2015 in a move proved controversial within the cryptocurrency ecosystem, helping the departure of several leading startups. Until now, only a few companies have been formally approved to offer such services in the state.