New York Tells Virtual Currency Firms to Document Ads by May 12, 2027
Key Facts
The New York State Department of Financial Services issued guidance on advertising and marketing by virtual currency businesses on November 12, 2026, signed by Acting Superintendent Kaitlin Asrow. The department asks covered firms to have compliant policies and procedures available for review starting May 12, 2027. They include virtual currency businesses licensed under Part 200 of New York regulations and limited purpose trust companies licensed under the state's Banking Law. The document sets supervisory expectations for promoting products, services and activities, including materials published by third parties. Documenting claims and monitoring promoters are among the procedures addressed by the guidance.
The guidance asks firms to present products, services and activities fairly in marketing materials and to base claims on verifiable evidence. The department's examples include exaggerated or unsupported claims, as well as claims that could mislead about performance or licensing status. Reviewing advertising language and verifying the basis for claims therefore become part of the policies the regulator expects. The document says describing trading as "fee-free" could create a misleading impression if other costs borne by the customer are not disclosed. Examples include spreads and markups, even when the ad emphasizes that no direct trading fees are charged.
The guidance requires disclosures to be clear and prominent, and discussion of potential benefits to be balanced with a picture of the risks. It also warns against materials suggesting that gains are guaranteed or that customers are protected from losses. For testimonials and endorsements, policies should ensure prominent disclosure that the experience described may not represent other customers' experiences. They should also explain the nature and amount of compensation when a testimonial is paid or tied to compensation. These expectations link how benefits and risks are presented with disclosure of financial interests that could affect the promotional message.
On governance, the department asks firms to assign responsibility for marketing oversight and establish formal review and approval of materials, with appropriate secondary review. Firms should also monitor use of their name or brand and respond promptly to potential fraud or unauthorized use. The document cites accounts impersonating the company and unauthorized promotional programs as examples that warrant monitoring. For third-party promoters, this includes due diligence when selecting and retaining them, as well as monitoring their activities. The guidance also asks firms to retain evidence supporting factual claims and copies of marketing approvals.
The expectations include an annual review and approval of advertising and marketing policies by the board of directors or a board-designated subcommittee. Policies should be comprehensive, with their scope and scale aligned with the firm's size, customer base and business model. This means the annual review is not limited to approving the document; it is part of a framework that defines oversight responsibilities and review of marketing materials. The department also asks firms to keep policies and procedures current and retain them for the period required under Section 200.12(a) of New York regulations. Compliant policies must be available for supervisory review starting May 12, 2027.
The New York State Department of Financial Services says the guidance may be updated and does not limit the scope or applicability of any law or regulation. The document thus clarifies the department's expectations rather than serving as a substitute for existing legal and regulatory requirements. The focus on advertising and promoters comes in a state that announced an investigation in June 2025 into fraudulent virtual currency ads published on social media. In that case, the department said the ads, many of them in Russian and published primarily on Facebook, used the names and likenesses of well-known people to attract victims. The investigation announced at the time led to the seizure of more than 100 domains and 17 accounts at domain registrars, while a court order froze $300,000 in cryptocurrency accounts linked to the advertisers.