The New York State Department of Financial Services (NYDFS) is pushing for companies that offer cryptocurrency services in the state to beef up their protective measures against fraud and market manipulation.

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

The new guidance will require those companies to implement written policies that evaluate “the full range of fraud-related and similar risk areas,” including market manipulation, in addition to providing 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 summarizing the actions taken to resolve any fraud and wrongdoing.

Superintendent Maria Vullo said in a statement:

“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 builds on New York’s BitLicense framework, which was greenlit in 2015 in a move proved controversial within the cryptocurrency ecosystem, prompting the departure of several prominent startups. To date, only a handful of companies have been formally approved to offer such services in the state.

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