In the absence of unified federal legislation on cryptocurrencies, New York is establishing its own comprehensive regulations for the sector as it looks to become the world’s crypto capital.
Adrienne Harris, superintendent of the New York Department of Financial Services (DFS), is playing a key role in this endeavor, and she says her approach is grounded in experience, not ideology.
“I have never been a believer that you should have ideology in financial regulation,” Harris said during a discussion at last week’s Consensus conference, held from May 14 to 16 in Toronto.
“I really am a firm believer that you can protect consumers and markets, look after the safety and soundness of companies and be good for business all at the same time. And we really seek to prove that out every day at DFS.”
Appointed in 2021, Harris described her stints in big law, the US Department of the Treasury, the Obama White House, Silicon Valley and academia. Her influence as a regulator has arguably been most deeply felt in crypto, where New York’s licensing regime — particularly its much-discussed BitLicense — has served as both a gatekeeper and a benchmark.
“There is unnecessarily tough, and then there’s necessarily tough,” Harris explained. “I think prior to me and my team coming in, things were probably unnecessarily tough … the team was under-resourced. There were maybe 30 people in the crypto unit. Now we have 60 people that are dedicated to virtual currency every day, all day.”
Under Harris’ leadership, the DFS has implemented an applications manual, instituted pre-application meetings and issued nine pieces of regulatory guidance. These reforms aim to demystify a process long criticized as opaque.
And while the BitLicense remains difficult to obtain, Harris believes the outcome justifies the rigor: “FTX, Voyager and Celsius didn’t pass our test, and therefore couldn’t do business in New York.”
This tough-but-fair regulatory stance has elevated New York’s position not only domestically, but also globally.
Even with various international counterparts, Harris told the Consensus audience that New York has become “the gold standard” in how virtual currencies are regulated. That international recognition is becoming increasingly formalized through initiatives like the DFS’ transatlantic regulatory exchange program with the Bank of England.
“They’ve sent us some senior staff. We’ve sent them some senior staff. It was really an arm-wrestling match to see who was going to get to move to London for six months to a year,” Harris joked. The program, which focuses on payments and cryptocurrencies, is already expanding to include other regulators in Europe and Asia.
Closer to home, Harris said the DFS is also working closely with Congress on stablecoin legislation.
“There isn’t a version of any of those bills — be it House or Senate, Rs or Ds — that don’t come to me and to the team to say, ‘Give us your feedback, give us your technical assistance, your insights,’” she said.
The DFS has already pioneered its own stablecoin guidelines, which require that any licensed stablecoin in New York be fully backed by a reserve of assets. That initiative, like much of DFS’ crypto framework, has been driven by a regulatory unit that Harris described as perhaps the largest of its kind anywhere in the world.
“We have folks that came from the (US Federal Reserve), we have cryptographers, we have financial crime experts … we have some real sort of crypto bros on the team. So it’s a great mix of expertise.”
Despite building out that workforce to 60 full-time crypto regulators, Harris admitted that resource constraints remain.
She noted that the DFS has hired more than 600 people across the department during her tenure and continues to recruit — especially amid talent shifts from federal agencies.
The result of all this work, Harris argued, is a regulatory environment that fosters innovation rather than hinders it.
“It used to be that people would say the regulations stifled that ecosystem, that innovation. But what we’ve learned over time is that that clarity, that certainty, that transparency really provides a fertile ground for that innovation,’ she said.
That sentiment is reflected in how regulated firms market themselves abroad. “Our regulated crypto companies market the fact that they are regulated by DFS,” Harris continued. “When they go overseas, they are telling those other regulators, ‘We have a license from DFS.’ And it goes a long way toward growing the ecosystem in New York.”
She also credited state leadership for supporting a dual agenda of consumer protection and economic development, citing New York Governor Kathy Hochul’s ‘steadfast commitment’ to making sure New York is a hub for responsible innovation. This growth aligns with Mayor Eric Adams’ ambition to make New York City the crypto capital not just of the US, but also the world — an aspiration Harris sees as within reach, if not already reality.
“When we think about crypto — having the fastest-growing sector in New York — put that together with the fact that New York is really the financial capital of the world. That is an environment, I think, perfect for the crypto ecosystem.”
Looking ahead, Harris said the DFS will continue on its current path, even as it hopes for stronger federal engagement.
“Hopefully we have federal legislation done, and some of those federal rules will be coming into place,” she said.
“We’re thinking about, of course, (artificial intelligence) and crypto. We’re thinking about deepfakes and market manipulation and crypto, and how those things overlap.”
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.