The New York State Department of Financial Services (DFS), the state’s top financial regulator, views itself as the leading cryptocurrency state regulator in the country. Its regulatory scheme began with its introduction of the BitLicense, a set of regulations that prohibited companies from engaging in “virtual currency business activity” in New York, or with New York residents, without a license. Very few were actually applied for, and fewer still issued. Much has been written about how this regulatory environment has stymied innovation in New York.
On November 15, 2023, DFS issued Guidance Regarding Listing of Virtual Currencies (“Guidance”), which tightened New York’s already strict rules for crypto listings. See our post here.
On May 30, 2024, DFS issued “Guidance Regarding Customer Service Requests and Complaints.” The DFS Guidance applies to Virtual Currency Entities (VCE”)—which covers both BitLicensees and limited purpose trust companies. It proceeds from the premise that a VCE’s policies and procedures with regard to customer service requests and complaints are unlikely to be sufficient unless they effectively address the issues and incorporate the mechanisms outlined in the Guidance.
At a minimum, there must be a phone number and an electronic text communication function (either email- or chat-based) for customers to make customer service requests and complaints with the VCE. Human customer service representatives must be available during normal business hours to answer calls. Electronic communication must be monitored by human customer service representatives during normal business hours and, regardless of when received, the response must provide a reference number and the expected process for resolution.
The VCE must provide regular updates to the customer regarding the status of the customer’s request or complaint, as well as an estimated timeframe for resolution. To the extent that a VCE uses artificial intelligence as part of its customer service processes, the VCE, in a clear and conspicuous manner, must inform the customer at the beginning of the interaction that the customer is using an AI tool and is not communicating with a human.
The Guidance also includes the following reporting requirements: “[1] A quarterly tabulation (beginning with the third quarter of 2024) of the number of customer service requests and complaints received via each method (e.g., by phone, email, chat, or complaint form) and within each request or complaint topic, and the average time from receipt to resolution of the requests and complaints; and [2] Customer service and complaint policies and procedures, including provisions that align with the standards, normal business hours, and timeframes described above relating to phone and electronic text-based mechanisms.”
