June 24, 2020
DFS SUPERINTENDENT LACEWELL LAUNCHES SERIES OF VIRTUAL CURRENCY INITIATIVES
Superintendent Lacewell Announces DFS and SUNY Sign Landmark MOU to Launch a Virtual Currency Program
DFS Issues New Proposal for Use of Virtual Currency Conditional Licensing Authority
DFS Issues Guidance Finalizing Proposed Self-Certification Regime for Coin-Listing
Additional Resources Issued to Help Current and Aspiring Virtual Currency Market Participants Navigate DFS Requirements to Launch and Operate in New York
Superintendent of Financial Services Linda A. Lacewell today announced that the New York State Department of Financial Services (DFS) and State University of New York (SUNY) have signed a Memorandum of Understanding (MOU) expressing their intent to launch a new SUNY-related virtual currency program, “SUNY BLOCK.” DFS also proposed a new conditional licensing framework that makes it easier for start-ups to enter the New York market. Once licensed by DFS, SUNY BLOCK will be able to support nascent virtual currency entities from local communities, including those started or run by students or alumni, through the proposed conditional licensing framework announced today.
“This MOU with SUNY is a strategic step to diversify and deepen the next wave of innovators in the virtual currency space in New York,” said Superintendent Lacewell. “The DFS actions announced today in consultation with numerous industry participants and the public will boost responsible innovation and help get New York’s economy back on its feet. DFS is proud to foster accessibility and will continue to blaze a trail in the virtual currency marketplace.”
“SUNY’s partnership with DFS further builds on Governor Andrew Cuomo’s efforts to boost New York’s economy by creating new opportunities within our high-tech industries,” said SUNY Chancellor Kristina M. Johnson. “Innovation is essential, and a key component is collaborating with SUNY’s campuses to develop the next-generation of developers, researchers, and leaders.”
This agreement will help expand the state’s virtual currency ecosystem to new geographies and demographics, and support Governor Andrew Cuomo’s efforts to foster an innovative New York economy and help New York build back better and stronger from the impacts of the COVID-19 pandemic.
Start-ups and emerging companies participating in the SUNY BLOCK program will be able to apply for a conditional license from DFS. This will help foster and diversify research opportunities and innovation emerging from SUNY faculty, staff, students, alumni and the start-ups they create, to help early-stage startups take the leap from idea to market.
The MOU announced today represents just one potential application of a new proposal by DFS to utilize its conditional licensing authority for the first time. Under the proposed conditional licensing framework, entities may apply for a conditional license when partnering with an existing entity authorized by DFS to engage in virtual currency business activity. The existing licensee would provide the conditional licensee with the operational, staffing, and other support the conditional licensee may need until it can obtain a full DFS virtual currency license or limited purpose trust charter on its own. DFS is requesting public comment on this proposed framework by August 10th.
The steps announced today come five years after the introduction of New York’s virtual currency license and are the result of significant outreach to industry and other experts in the field. DFS has received feedback regarding virtual currency firms’ experiences with DFS, and gathered ideas to make it easier for virtual currency companies to successfully operate in New York.
Following this outreach, today DFS is also announcing final guidance regarding licensees’ ability to self-certify the use of new coins, and establishing an approach by which DFS will provide a list of approved coins that all licensees can easily adopt. This follows the Superintendent’s announcement during DC Fintech Week in October 2019 that DFS would revisit the virtual currency requirements established in 2015 and evaluate if any adjustments should be made to responsibly adapt the regulations and their application to an evolving industry.
DFS is also issuing additional resources, including a notice of DFS practices aimed at creating a more transparent and timely process for the evaluation of virtual currency license applications and new virtual currency-related Frequently Asked Questions (FAQs) that address questions identified through discussions with current and prospective market participants. The FAQs will be updated and augmented on an ongoing basis as DFS receives questions and feedback from industry and New Yorkers.
For more information go to: www.dfs.ny.gov/vc.