Designated as the VOLT initiative this ongoing project has focused on enhancing DFS’s Vision, Operations, Leadership, and Technology in order to "further cement DFS’s role as the leading regulator of virtual currency in the nation." 

In furtherance of this initiative, Superintendent Harris published proposed guidance which adopts enhanced criteria for coin-listing and delisting procedures, as well as updated guidance on the framework for designating coins or tokens to the DFS greenlist.  

The proposed guidance "enhances the original framework issued by the Department in 2020 by clarifying DFS’ expectations with respect to the coin-listing and delisting policies of DFS-regulated entities".

The guidance:  

• heightens risk assessment standards for coin-listing policies and tailors enhanced requirements for retail consumer-facing businesses; 
• requires licensees to develop and submit to DFS for approval a coin-delisting policy that is compliant with this proposed guidance; and 
• updates the DFS Greenlist, the list of coins and tokens approved for all licensees to list or custody, and Greenlist process. 

The proposed guidance is open for public feedback until October 20, 2023.  

The changes include:  

• the creation of three tiers of companies, further tailoring the regulation to a diverse set of businesses with different defensive needs. Furthermore, based on feedback from the industry and in recognition of the realities of operating a small business, the proposed amendment increases the size threshold of smaller companies that are exempt from many parts of the regulation;    
• enhanced governance requirements, thereby increasing accountability for cybersecurity at the Board and C-Suite levels;   
• additional controls to prevent initial unauthorised access to technology systems and to prevent or mitigate the spread of an attack;   
• requiring more regular risk and vulnerability assessments, as well as more robust incident response, business continuity and disaster recovery planning; and   
• directing companies to invest in regular training and cybersecurity awareness programs that are relevant to their business model and personnel.   

"With cyber-attacks on the rise, it is critical that our regulation keeps pace with new threats and technology purpose-built to steal data or inflict harm,” said DFS Superintendent Adrienne A. Harris. “Cyber criminals go after all types of companies, big and small, across industries, which is why all of our regulated entities must comply with these standards – whether a bank, virtual currency company, or a health insurance company.” 

The proposed amended regulation is subject to a 60-day comment period, which ends on 9 January 2023.

The report, along with a user-friendly interactive website at virtualmarkets.ag.ny.gov, presents information collected by the Attorney General’s office from 10 virtual asset trading platforms based in the United States and abroad, as well as the conclusions reached by the Attorney General’s office about the state of the virtual trading markets as a whole. The Attorney General's office also referred three platforms - Binance, Gate.io, and Kraken - to the New York State Department of Financial Services for possibly operating unlawfully in New York.

In April 2018, the Attorney General’s office sent letters to 13 major virtual currency trading platforms requesting key information on their operations, internal controls, and safeguards to protect customer assets. The virtual markets integrity initiative sought to increase the transparency and accountability of platforms that retail investors rely on to trade virtual currency, and to inform enforcement agencies, investors, and consumers.

The Attorney General’s office asked the platforms to disclose information on six major topics, including  ownership and control, basic operation and fees, trading policies and procedures, outages and other suspensions of trading, internal controls, and privacy and money laundering. In particular, the Attorney General’s office asked the platforms to describe their approach to combating suspicious trading and market manipulation; their policies on the operation of bots; their limitations on the use of and access to non-public trading information; and safeguards to protect customer funds from theft, fraud, and other risks.

Key findings included:

• a lack of protection from abusive trading practices;
• pervasive conflicts of interest; and
• limited protection of customer funds.