This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
As the landscape of federal crypto regulation undergoes significant changes, companies are urged to take proactive steps by engaging with state watchdogs early on.
New York Department of Financial Services Superintendent Adrienne Harris emphasized the importance of transparency and communication at the recent Blockchain Association Policy Summit.
“Never surprise your regulator,” Harris advised, highlighting the need for companies to initiate dialogue before regulatory issues arise. Waiting until enforcement actions are already in progress is a mistake, she cautioned, urging companies to start discussions even before submitting applications.
New York has been at the forefront of state-level regulation, introducing the pioneering “BitLicense” program in 2014. This framework, which mandates registration for businesses engaged in digital asset activities, has become a model for other jurisdictions and Congress.
Despite initial industry backlash, Harris defended the BitLicense as a tool to facilitate market access while prioritizing consumer protection and responsible industry growth. She stressed that regulators should not dictate market preferences but ensure a safe and sustainable environment for market participants.
While the stance of President-elect Donald Trump on state authority in crypto regulation remains unclear, his administration’s efforts to streamline federal agencies like the SEC could potentially empower states in overseeing the crypto industry.