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New York Regulator: Crypto Firms Must Provide ‘Timely’ Customer Service

crypto regulation

New York’s financial regulator has introduced new customer service guidelines for cryptocurrency companies.

The new guidance announced by the New York State Department of Financial Services (DFS) requires those companies to uphold “effective” policies and procedures to promptly address customer service issues, and to collect relevant data to make sure these companies are resolving the complaints in a fair, timely manner.

“Consumers have a right to a transparent and timely process for resolving complaints and answering questions, irrespective of the company or product in question,” DFS Superintendent Adrienne Harris said in a Thursday (May 30) news release. “This guidance outlines clear expectations for a positive customer experience, which benefits both consumers and business.”

The regulator expects crypto firms to follow “commonly effective policies and procedures,” such as giving customers with both a phone and electronic text mechanism to submit requests and complaints, per the release.

In addition, companies should offer regular updates and estimated resolution time frames to the customer, giving customers the means to keep up to date on the status of their request or complaint, “and providing an explanation when the outcome of an issue is less than what the customer was seeking,” DFS said.

The new guidance comes at a time when, as PYMNTS wrote earlier this month, crypto is trying to make deeper inroads into the world of traditional finance.

“Big banks and financial institutions are much more interested today than they certainly were five or six years ago, when we rolled out some products for the first time,” Brooks Entwistle, senior VP of global customer success and managing director at Ripple, told PYMNTS last fall. “You certainly almost never saw the boardroom when you brought up the topic of blockchain and especially crypto in the early days.”

And this receptivity is having an impact across the marketplace. For example, online brokerage Robinhood Markets recently reported quarterly profits that surpassed expectations, fueled by strong crypto trading volumes.

At the same time, Robinhood faces challenges in the form of a Wells notice from the Securities and Exchange Commission (SEC),a signal of potential enforcement action against the company and something that raises concerns about the future of the firm’s crypto trading arm.

“That, it seems, exemplifies the state of the crypto sector in 2024: two steps forward, and three steps back,” PYMNTS wrote. “Or maybe, it is the other way around — only time will tell.”