The New York State Department of Financial Services (DFS) introduces new customer service standards for BitLicensed virtual currency entities. These standards aim to ensure better customer treatment and transparency, with a focus on prompt and efficient service.
The New York State Department of Financial Services (DFS) has announced a new set of mandatory customer service standards for DFS-regulated virtual currency entities (VCEs), known as BitLicense holders. These standards are designed to enhance the quality of customer service provided by these entities and ensure they treat their customers fairly. The DFS will closely monitor the implementation of these standards, assessing the adequacy and efficiency of each VCE's customer service policies based on their records.
Detailed Customer Service Requirements
The newly established requirements set clear expectations for how VCEs should handle customer interactions:
Human Interaction: VCEs must ensure that human customer service representatives are available during business hours. During off hours, customers should be able to leave voicemails.
Electronic Communications: Electronic communications should receive automatic acknowledgments with an estimated response time.
Transparency: Frequently asked questions (FAQs) must be accessible to all viewers, including those who do not hold accounts with the VCE.
AI Disclosure: Customers should be immediately informed if they are interacting with artificial intelligence instead of a human representative.
Tracking and Accountability: Every customer request or complaint must be tracked, and the responsible customer service personnel must be identified to the DFS.
These requirements aim to create a more transparent and responsive customer service environment. VCEs will be expected to provide records of their policies, procedures, and the details of requests and complaints, including their resolution times.
Recordkeeping in the form of tabulation and customer feedback is mandated to begin in the third quarter of 2024. VCEs must make these records accessible to the DFS by November 1. This new guidance, as highlighted by DFS Supervisor Adrienne Harris, sets clear expectations for a positive customer experience, benefiting both consumers and businesses.
VCEs operating in New York are regulated under the BitLicense framework or are chartered as limited-purpose trust companies engaging in virtual currency activities. As of now, there are 32 VCEs holding BitLicenses or trust charters. These entities are required to pay their supervisory costs, a regulation comparable to those imposed on banks and insurance entities, which was adopted by the DFS in April 2023.
The DFS has positioned itself as the leading regulator of virtual currency. However, the BitLicense regime has faced criticism over the years for its stringent requirements. Major crypto firms such as Bitfinex, Kraken, and Paxful exited the state when the BitLicense was introduced in 2015. Pro-crypto New York City Mayor Eric Adams has also criticized the BitLicense for its "stifling" requirements, calling for more crypto-friendly regulations in April 2022. Despite the criticism, the DFS has continued to tighten its regulatory framework, with significant measures introduced in November 2023.
The DFS’s new customer service standards reflect its ongoing commitment to ensuring a robust regulatory environment for virtual currency entities in New York. By setting clear expectations and monitoring compliance, the DFS aims to foster a fair and transparent market that benefits both consumers and businesses. As the BitLicense evolves, these enhanced customer service standards mark a significant step towards improving the overall experience for cryptocurrency users in New York.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)