New York financial regulator issues cryptocurrency guidance for banks

The New York State Department of Financial Services (NYDFS) on Thursday issued digital asset steering to state-regulated banks laying out what info monetary establishments should submit earlier than getting approval to have interaction in digital currency-related actions.

The steering, one of many clearest paths ahead but for banks to supply cryptocurrency companies, instructs banks to submit a marketing strategy with particulars of the proposed exercise, element how such a service would influence the financial institution’s capital and liquidity and inform NYDFS of its plans at the very least 90 days beforehand.

In an announcement, NYDFS Superintendent Adrienne Harris mentioned the brand new insurance policies are “vital to making sure that buyers’ hard-earned cash is protected” and that New York-regulated banks stay aggressive.

The regulator will “make a complete evaluation” of the data offered underneath the steering to find out whether or not a financial institution ought to be permitted to have interaction in a proposed crypto-related exercise, in response to an trade letter despatched Thursday to regulated establishments.
Such actions might embody safeguarding cryptocurrency on behalf of shoppers or providing shoppers publicity to sure digital property.

As a part of the marketing strategy banks are anticipated to undergo NYDFS, banks ought to element a complete threat evaluation for the service they want to interact in, in addition to anticipated prices of the venture and what related client safety insurance policies will apply.

The steering is efficient instantly, NYDFS mentioned.

It follows a tumultuous month for cryptocurrencies, sparked by the collapse of FTX, one of many largest crypto exchanges, which filed for chapter Nov. 11. Its founder and former chief government officer Sam Bankman-Fried was charged by federal prosecutors on Tuesday with misappropriating billions of {dollars} and violating marketing campaign finance legal guidelines.

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