New York

New York Regulators Crack Down On Crypto Firms Mismanaging Funds

The New York State financial regulator is set to issue new guidelines aimed at preventing another collapse of crypto-monopoly like FTX.

According to a new report from Reuters, the New York State Department of Financial Services (NYDFS) is today issuing regulations that will ensure crypto companies keep customers’ digital assets separate from their own.

The guidelines will also inform cryptocurrency companies on how they should disclose to customers their methods of accounting for customer digital assets. This is the latest in a series of new regulations announced by the NYDFS over the past year.

The State Regulator Issued New Rules

In December 2022, the state regulator issued new rules for banks planning to submit proposals to venture into crypto.

Under guidelines released last month, New York-regulated banking organizations and NYDFS-approved foreign banking organizations were told they must submit a business plan 90 days before engaging in banking activities. crypto and received the types of information the department will consider when evaluating proposals.

NYDFS Superintendent Adrienne Harris said of the upcoming new guidelines,

“It’s timely, but truth be told, it was something we had on our political roadmap even before FTX…”

Harris, a former senior adviser to the US Treasury Department, continues,

“While I would never be bold enough to say that no New Yorker will be harmed in all of this, I think it is very fair to say that New Yorkers are better off than anyone else in the country thanks to the framework That we have. »

The new guidance comes in the wake of FTX’s high-profile collapse in late 2022. It also follows cryptocurrency lender Genesis’ Chapter 11 bankruptcy filing, which affected users of Gemini Earn.

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