In the wake of reports accusing Tether of market manipulation, an NY regulator has issued a warning to all Bitlicense firms to exercise vigilance in monitoring the market for harmful practices such as market manipulation.
Earlier this week, the New York State Department of Financial Services (DFS), released a guidance paper which included a warning to all crypto-related licensed companies that they were responsible for monitoring and taking the appropriate action against harmful practices in the industry such as fraud or market manipulation.
The warning placed particular emphasis on instances of market manipulation as all Bitlicense companies were reminded that they were required by law to remain vigilant against any occurrences. So far, the DFS has approved six Bitlicenses for companies including Bitflyer USA, XRP II, Coinbase Inc., and Circle Internet Financial. In addition, the regulator has granted charters to itBit Trust Company and Gemini Trust Company.
According to DFS superintendent, Maria T. Vullo, the regulating agency took the lead as early as 2015 by ensuring that their regulation properly addresses concerns in the crypto industry and that licensed companies are vigilant in monitoring and preventing risks.
Vullo emphasized the seriousness of market manipulation and stated that this practice threatened to undermine the integrity of crypto-related companies and the market as a whole. Vullo concluded that the DFS would play an active role in guiding licensed firms as the crypto industry evolves to safeguard the sector against fraud and market manipulation to ensure a strong and robust market.
The DFS guidance paper also instructed licensed companies to employ a comprehensive set of policies which addresses any issues that might arise in the industry from fraud to theft. The guidance paper states that comprehensive policies will make for efficient management and quick response time in case of an emergency. The paper states that policies should include all identified risks should clearly state who is responsible for monitoring risks, and have a plan of action on hand in the case of any risk occurring.
Upon discovering any misconduct, licensed companies are required by law to submit a detailed report to the DFS. In addition, the company will be required to co-operate with the DFS and submit all subsequent reports and evidence that is relevant to the reported event.