New York Mandates New Standards for Virtual Currency Customer Service

The BitLicense has been strengthened with new mandatory standards to ensure better customer treatment.

The New York State Department of Financial Services (DFS) has instituted customer service standards for DFS-regulated virtual currency entities (VCEs) and will start monitoring their implementation. Using VCEs’ records, the DFS will evaluate the adequacy and efficiency of customer service policies.

The DFS has specified detailed requirements for VCE phone and electronic communications, transparency, and the posting of online frequently asked questions (FAQs). VCEs must provide records of their policies and procedures, as well as details of requests and complaints received, including resolution times.

Establishing the criteria for excellent customer service

The new requirements are primarily basic. “Human customer service representatives” must be available during business hours, while customers should be directed to voicemail after hours. Electronic communications should receive an automatic acknowledgment with an estimated response time. FAQs should be accessible to both account holders and non-account holders. Additionally, customers must be promptly informed if they are interacting with artificial intelligence instead of a human.

Every customer request or complaint must be tracked, and the individuals responsible for customer service must be identified to the DFS.

Recordkeeping, including tabulation and customer feedback, must commence in the third quarter of 2024 and be accessible to the DFS by November 1. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and businesses,” Supervisor Adrienne Harris stated on May 30.

Regulation for supremacy

VCEs in New York are either regulated under the BitLicense framework or chartered as limited-purpose trust companies involved in virtual currency activities. Presently, there are 32 VCEs holding BitLicenses or trust charters. They are mandated to cover their supervisory expenses under a DFS regulation implemented in April 2023, on par with banking and insurance entities.

The DFS aims to become the primary regulator of virtual currency. When the BitLicense was introduced in 2015, major crypto firms such as Bitfinex, Kraken, and Paxful exited the state. The BitLicense framework has faced criticism, notably from pro-crypto New York City Mayor Eric Adams in April 2022, for its stringent requirements. Nonetheless, the DFS tightened its regulatory oversight on VCEs in November 2023.

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