NYDFS Orders Crypto Firms to Set Advertising Policies by May 2027

New York's financial regulator has directed the crypto firms it licenses or charters to maintain comprehensive advertising and marketing policies and have them ready for departmental review by May 12, 2027. The New York State Department of Financial Services (NYDFS) issued the guidance on Nov. 12.

It applies to BitLicense holders and to limited-purpose trust companies authorized for virtual currency business. A separate report gave May 10, 2027 as the date by which firms are expected to implement the measures. That discrepancy has not been resolved; this article uses the May 12 review date reported alongside the linked guidance.

Supervisory guidance, not a new rule

The document is supervisory guidance rather than a new regulation. It builds on an existing BitLicense rule that already prohibits false, misleading or deceptive advertising and requires firms to retain marketing materials for at least seven years.

Policies must be reviewed and approved annually by the board or a designated board committee, with controls proportionate to a firm's size, customer base and business model.

What counts as advertising

The scope is broad. It covers content labeled as education, and material aimed at institutional customers, if it could reasonably be seen as promoting engagement with a firm's crypto products. Material produced or distributed on a firm's behalf is also included.

NYDFS singled out "no-fee trading" claims that omit other costs, such as spreads or markups, as potentially misleading. Claims must be evidence-based and verifiable, and firms must preserve the evidence supporting them along with copies of approvals.

Other expectations include:

• Promotions must discuss risks in a balanced way and avoid promising financial gain or guaranteeing against loss.
• Testimonials must disclose that the experience may not be representative, plus the nature and amount of any compensation.
• Risk disclosures cannot sit behind a "click for more" mechanism or be deferred to the end of a podcast.
• Materials must identify the licensed or chartered entity.

Governance and third parties

On governance, the department expects formal approval with secondary review and clear roles and responsibilities for advertising and marketing. Firms must conduct due diligence on, and monitor, third-party promoters. They also need a process to address fraudulent use of their brands, including impersonation accounts.

Acting Superintendent Kaitlin Asrow framed the guidance as consumer protection.

"Today's guidance reinforces our commitment to protecting New Yorkers and ensures advertising and marketing practices in the virtual currency space are clear, comprehensive, and accessible."

Kaitlin Asrow, Acting Superintendent, NYDFS

Asrow also said that "for more than a decade, DFS has set the global standard for virtual currency oversight and consumer protection."

Why it matters

NYDFS launched its BitLicense regime in 2015, and the new guidance carries that oversight into marketing practice. Other regulators, including in the UK, have also turned their attention to crypto advertisements.

For licensed firms, the practical task over the next six months is documentation: board-level sign-off, evidence files supporting fee and other factual claims, and oversight of third-party promoters. The department has acted against its licensees before, having penalized Paxos $48.5M over lax compliance in a Binance stablecoin arrangement.