The New York State Department of Financial Services (NYDFS) is publishing new rules for banks planning to submit proposals to venture into crypto.
Under the new guidance, New York-regulated banking organizations and NYDFS-licensed foreign banking organizations must submit a business plan 90 days before engaging in crypto activities.
The guidance provides the types of information that the department will take into account when assessing proposals. The regulator says it will look into the covered institution’s business plan, risk management, corporate governance and oversight, consumer protection, financials and legal and regulatory analysis.
“The Department will make a comprehensive assessment of information presented under this Guidance to determine whether any proposed activity would—based on the facts and circumstances presented and including the risk mitigation measures the Covered Institution has developed to support the activity—be appropriate for a Covered Institution to undertake.”
The department is issuing the guidance in a bid to mitigate risks associated with digital assets.
Says NYDFS Superintendent Adrienne A. Harris,
“Today’s Guidance is critical to ensuring that consumers’ hard-earned money is protected, that New York regulated banking organizations remain resilient and competitive, and that the expectations are clear for those that wish to submit proposals for virtual currency-related activity.”
The regulator is releasing the new rules in the wake of the FTX implosion. The former second-largest crypto exchange became insolvent following a surge of customer withdrawals. Its former CEO Sam Bankman-Fried is accused of using customer funds to finance the trading activities of affiliate firm Alameda Research.
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inboxCheck Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Quardia/Plasteed
