Virtual currency firms in New York will have to follow new customer service obligations, state's financial watchdog says

Companies designated as "virtual currency entities" (VCEs) in New York will need policies and procedures in place to "promptly address customer services requests and complaints," according to the state's top financial watchdog.

New York State Department of Financial Services Superintendent Adrienne Harris issued that guidance on Thursday, calling on VCEs to update customers on their outstanding requests and complaints. The state defines VCEs to include companies that have New York's BitLicensees, as well as those chartered as limited purpose trust companies under the New York Banking Law, to engage in virtual currency business activity. In other words, this basically means cryptocurrency businesses that are licensed to operate in New York.

“Consumers have a right to a transparent and timely process for resolving complaints and answering questions, irrespective of the company or product in question,” Harris said in a statement. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business.”

NYDFS' latest guidance is part of its VOLT initiative to bolster the regulator's oversight over virtual currencies, according to the statement. NYDFS has been active in regulating crypto in the state for years, having launched its BitLicense regime in 2015. A slew of firms have virtual currency licenses in the state, including Coinbase Inc., Circle Internet Financial, LLC. and Robinhood Crypto, according to its site , although some firms closed up shop in the state.

The guidance

VCEs have to provide customers with a way to submit complaints and requests through the phone or a text function such as email or chat, and also provide updates regularly and estimated timelines to the customer, NYDFS said.

Virtual currency entities licensed in New York will have to maintain an analysis on a quarterly basis of the requests and complaints they receive, which will be monitored by NYDFS, according to a statement. Firms also have to provide related policies and procedures. Those documents must be available for NYDFS to review by Nov. 1, 2024, according to the guidance .

"The information contained in this Guidance is not intended to be exhaustive, and the Department may update it from time to time for any reason, including, for example, in response to new information, evolving markets, or additional experience," NYDFS said. "This Guidance is not intended to limit, and does not limit, the scope or applicability of any law or regulation."