The New York State Department of Financial Services (DFS) has introduced a set of standards for customer service in virtual currency entities (VCEs) that fall under its regulation. The DFS will now monitor the implementation of these standards and evaluate the effectiveness and efficiency of the customer service policies based on the records provided by the VCEs.
The requirements set out by the DFS cover various aspects of customer service, including phone and electronic communications, transparency, and the posting of frequently asked questions (FAQs) online. VCEs will be expected to maintain records of their policies, procedures, and the requests and complaints they receive, along with the time taken to resolve them.
The new requirements mainly focus on fundamental principles of good customer service. VCEs must ensure that “human customer service representatives” are available during business hours, while voicemail should be provided during off hours. Electronic communications must be acknowledged automatically, with an estimated response time given. FAQs should be accessible to all viewers, even those without an account with the company. Additionally, customers should be promptly informed if they are interacting with artificial intelligence instead of a human representative.
The DFS requires that every customer request or complaint be tracked, and the individuals responsible for customer service must be identified to the DFS.
As part of the new regulations, VCEs will need to maintain records and gather customer feedback starting from the third quarter of 2024. These records must be accessible to the DFS by November 1st. Supervisor Adrienne Harris stated in a May 30th statement that these guidelines establish clear expectations for a positive customer experience, benefiting both consumers and businesses.
VCEs in New York are regulated through the BitLicense framework or are chartered as limited-purpose trust companies engaging in virtual currency activities. Currently, there are 32 VCEs with either BitLicenses or trust charters. Similar to banks and insurance entities, these VCEs are required to cover their supervisory costs under a DFS regulation enacted in April 2023.
The DFS aims to be the leading regulator in the virtual currency space. However, the introduction of the BitLicense in 2015 led to several major crypto firms, such as Bitfinex, Kraken, and Paxful, leaving the state. The BitLicense regime has faced criticism, including from pro-crypto New York City Mayor Eric Adams in April 2022, who described its requirements as “stifling.” Nevertheless, the DFS further strengthened its regulatory oversight of VCEs in November 2023.
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