The New York Department of Financial Services (NYDFS) just issued guidance that instructs cryptocurrency service providers to implement complaint resolution mechanisms. Crypto companies must be regulated by the NYDFS, by registering for a “BitLicense” granted by the agency, to do business in the state of New York.
The NYDFS will assess the application and efficacy of these policies to satisfy such customer issues.
Guidance expectations
The guidance outlines the agency’s “expectations” of cryptocurrency service providers, which includes expecting such businesses to include policies which cover response and resolution monitoring, and reporting.
The guidance specifically requires that service providers maintain policy records, including “quarterly analysis of requests and complaints they receive” and to provide customers with both a phone and electronic text mechanism to submit requests and complaints.
“Consumers have a right to a transparent and timely process for resolving complaints and answering questions, irrespective of the company or product in question,” said NYDFS Superintendent Adrienne Harris. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business.”
Effective policies and procedures
NYDFS outlines in the guidance what would constitute effective policies and procedures in handling customer complaints and other issues, which could be helpful to any business showing up its customer-compliant protocols. Those instructions are:
- Provide customers with both a phone and electronic text mechanism to submit requests and complaints, in addition to any other methods to submit requests and complaints a virtual currency provider may offer.
- Provide regular updates and estimated resolution timelines to the customer, a means for the customer to stay apprised of the status of their request or complaint, plus an explanation when the outcome of an issue is less than what the customer was seeking.
- Publish an FAQ or similar communication without requiring an account into which to log.
- Track requests and complaints, along with feedback on customer satisfaction.
- Report a quarterly tabulation of the number of requests and complaints received, broken down by method and request/complaint topic.
- Provide a copy of their customer service and complaint policies and procedures.
- Specify the individual or individuals responsible for the customer service and complaint policies and procedures.
NYDFS’s continued growth of the virtual currency unit
The agency said that, prior to adoption, its virtual currency unit conducted in-depth research, met with key stakeholders and received constructive feedback which informed the guidance.
Last year, the agency issued stricter guidelines for cryptocurrency listing and de-listings, requiring crypto companies to submit their coin listing and delisting policies for approval.
“Consumers have a right to a transparent and timely process for resolving complaints and answering questions, irrespective of the company or product in question.”
Adrienne Harris, NYDFS Superintendent
The virtual currency unit has also issued helpful guidance on the issuance of US-backed stablecoins and use of blockchain analytics.
In one of its recent enforcement actions against a virtual currency entity, the agency announced in January that Genesis Global Trading, Inc would pay an $8m penalty for compliance failures that violated NYDFS’s virtual currency and cybersecurity regulations and left the company vulnerable to illicit activity and cybersecurity threats.
NYDFS examined Genesis twice in routine inspections, citing the business for anti-money-laundering and cybersecurity failures, which the firm addressed with “little effort or resources” between the two inspections. The business apparently had no dedicated officer to oversee AML compliance, NYDFS said.
