NYDFS makes licensed crypto firms answer for their promoters and impostors

New York’s Department of Financial Services (NYDFS) has issued new rules that make licensed crypto firms responsible for the influencers they hire for ads and for their impostors too.

Crypto firms have until May 10, 2027, to comply with its new rules. 

What does the new NYDFS guidance require from crypto firms?

Licensed virtual currency entities, known as VCEs, now have to operate under the new rules issued by the New York State Department of Financial Services (NYDFS).

Acting Superintendent Kaitlin Asrow laid out the rules. First, a firm must be able to prove any claim it makes in an ad. 

Second, every ad must make clear which licensed company is behind it. Lastly, firms must have real internal processes for how marketing is built, reviewed, and approved.

Since the 2015 rulebook took effect, NYDFS has required licensees to include a “licensed by NYDFS” statement in their ads. That statement tells customers that a regulator oversees the firm. 

The new guidance makes clear that a state license does not mean that the state is endorsing the tokens, trades, or returns it offers. Firms are also warned not to suggest otherwise in their ads.

Firms are also now required to check the background of outside partners they work with and watch for people misusing their brand. Policies must be reviewed every year, and NYDFS says it will look at them during compliance checks.

Why is the NYDFS focused on misleading ads and impostors?

In June, the U.S. Federal Trade Commission pointed out that Americans lost $3.5 billion to imposter scams in 2025. About $1 billion of those losses were due to scammers posing as businesses and banks. Social media alone accounted for more than $2.1 billion in losses.

In August 2024, the FBI’s Internet Crime Complaint Center warned about scammers who pretended to work for crypto exchanges. The scammers sent fake security alerts to trick people into giving up their log-in details, then emptied their accounts. 

Misleading crypto ads have been banned in New York since 2015 under 23 NYCRR § 200.18. However, regulators say firms often break such rules. The new guidance simply explains what following that rule should look like day to day.

Notably, the Financial Industry Regulatory Authority (FINRA) said in a January 2024 report that about 70% of the roughly 500 retail crypto communications it reviewed may have broken its fair-and-balanced rules. It pointed to false claims that crypto works like cash and wrong statements about which investor protections apply. 

Cryptopolitan previously reported that Europe was scrutinizing crypto promoters and finance influencers. 

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