New York sets customer service standards for virtual currency entities

The New York State Department of Financial Services (DFS) has established customer service standards for DFS-regulated virtual currency entities (VCEs) and will begin monitoring their implementation. Based on the VCEs’ records, the DFS will assess the adequacy and efficiency of customer service policies. 

The DFS set out detailed requirements for VCE phone and electronic communications, transparency and online frequently asked question (FAQ) posting. VCEs will be expected to provide records of their policies and procedures and the requests and complaints they receive along with resolution times.

Defining good customer service

The new requirements are largely elementary. “Human customer service representatives” should be available during business hours, and customers should be connected to voicemail during off hours. Receipt of electronic communications should be automatically acknowledged with an estimated response time. FAQs should be accessible to viewers who do not hold an account with the company. Customers should be informed immediately if they are interacting with artificial intelligence rather than a human.

Every customer request or complaint must be tracked and the person or persons responsible for customer service have to be identified to the DFS.

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Recordkeeping in the form of tabulation and customer feedback must begin in the third quarter of 2024 and be accessible to the DFS by Nov. 1. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business,” Supervisor Adrienne Harris said in a May 30 statement.

Regulating for preeminence

VCEs are regulated through New York’s BitLicense or are chartered as limited-purpose trust companies engaging in virtual currency business activities. There are currently 32 VCEs with BitLicenses or trust charters. They are required to pay their supervisory costs under a DFS regulation adopted in April 2023, comparably with bank and insurance entities.

The DFS seeks to be “the preeminent regulator of virtual currency.” Major crypto firms, including Bitfinex, Kraken and Paxful, departed the state when BitLicense was instituted in 2015. The BitLicense regime has been criticized, notably by pro-crypto New York City Mayor Eric Adams in April 2022, for its “stifling” requirements. However, the DFS tightened its regulatory grip on VCEs in November 2023.

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