On Wednesday NYDFS released Guidance on Prevention of Market Manipulation and Other Wrongful Activity.
In this guidance, The Department emphasizes that crypto companies are required to implement measures designed to effectively detect, prevent, and respond to fraud, attempted fraud, and similar wrongdoing.
According to the guidance, upon the discovery of any fraud, crypto companies must submit to the Department a report stating all pertinent details known at the time of the report.
The guidance also mandates that virtual currency entities take steps to investigate fraud and wrongdoing, and upon the completion of a given investigation, to issue a statement summarizing the actions taken to resolve any fraud and wrongdoing.
According to superintendent Maria Vullo, the Department is encouraging crypto companies to take the necessary steps to guard against fraud and to be ready for market manipulation. Due to these actions, the market can evolve with strong regulatory supervision.