New York's financial regulator has told crypto firms to set up advertising and marketing policies by May 2027. The guidance targets deceptive claims, undisclosed paid testimonials and review processes.
New York's top financial regulator issued guidance on Thursday that sets expectations for how cryptocurrency firms advertise, with firms expected to put the measures in place by May 2027. The New York State Department of Financial Services (NYDFS) outlined its expectations for "accurate content, clear disclosures, and an established governance and review process" in the guidance.
The guidance covers BitLicense holders and limited-purpose trust companies authorized to conduct virtual currency business. It is supervisory guidance rather than a new regulation, and it builds on an existing BitLicense rule that already prohibits false, misleading or deceptive advertising.
What counts as misleading
NYDFS said advertising should not be deceptive or include exaggerated claims, and should not say trading carries no fee while omitting other costs. The regulator also said firms need to file disclosures on whether people giving testimonials were compensated.
The Defiant reports that NYDFS singled out no-fee trading claims that leave out other customer costs, including spread or markups. Risk disclosures also cannot be obscured behind a click-for-more mechanism, according to the same report.
Governance and scope
Firms need a governance and review structure with clear roles and responsibilities for advertising and marketing. Under the guidance, policies must undergo annual review and approval by a firm's board or a designated board committee.
The scope reaches beyond conventional ads. According to The Defiant, content labeled as education and material aimed at institutional customers count if they could reasonably be viewed as promoting engagement with a firm's crypto products, services or activities.
NYDFS has long been a leading regulator of the crypto industry, launching its BitLicense regime in 2015. Other regulators globally have also turned their attention to advertisements, including in the UK.
Sources: The Block, The Defiant
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