The state, a notoriously demanding regulator of the industry, has released detailed guidelines for banks’ crypto activities — and some licensed banks may have to play catchup.
The new york state Department of financial Services (DFS) released guidance on Dec. fifteen for regulated banks seeking to have interaction in activities with virtual currency. The guidance, that took effect immediately, describes the applying process and “summarizes the kinds of data the Department considers relevant” for obtaining the agency’s approval.
The 11-page document consisted for the most part of bullet points because it described the informational needs for several classes, like “Business Plan” and “Consumer Protection,” very well, followed by a series of formal checklists.
Approval is needed 90 days before participating in activities, the document said. Approval for prior activities “does not represent general consent” for alternative activities, and a few activities by third-party service providers might require the agency’s approval as well.
As much as it pains me to admit this, the @NYDFS Bitlicense accomplishes many of these goals; and the DFS is working closely w/ other regulators like the UK.
Furthermore, institutions that are already engaged in virtual currency activities were instructed within the statement accompanying the guidance to examine in with their points of contact at the agency immediately.
DFS superintendent Adrienne A. Harris said during a statement on the new guidance:
“It is critical that regulators communicate in a timely, transparent manner about the evolution of our regulatory approach.”
New York is known as a tough regulator of crypto businesses, and has return come criticism from new york city mayor Eric Adams et al. for stifling economic innovation and growth. Harris has defended the state’s approach vigorously. In light of this, detailed guidance is also extremely valuable for regulated institutions.
Related: New York’s mayor seeks balance with regulators after PoW mining moratorium
New York was one in every of the first states to license digitalcurrency activities once it introduced its so-called BitLicense in 2014. It also claimed to be the first state to impose strict requirements for stablecoin reserves and redeemability once it set the rules in June. In December, the state proposed adding an annual assessment fee for licensed crypto companies under new powers granted to the agency in April.
(DEREK ANDERSEN, Cointelegraph, 2022)