Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
Matthew L. Levine Interesting take in pymts.com on NYDFS Crypto Regulation: “NYDFS will not only remain relevant as the regulator of the largest financial center in the world, but as the obvious yardstick against which proposed national rules are measured.” Article is found here: https://www.pymnts.com/cryptocurrency/2022/in-adrienne-harris-nydfs-getting-firm-but-friendly-crypto-regulator/
Adrienne A. Harris has been confirmed as NYDFS Superintendent. Her statement may be found here: https://www.dfs.ny.gov/reports_and_publications/statements_comments/st202201251
Want to know what’s on the mind of NYDFS Superintendent Adrienne Harris? Interesting discussion including re: crypto, fintech, the Community Reinvestment Act, and cannabis during her confirmation hearing in the NYS Senate, link here: https://www.nysenate.gov/calendar/meetings/insurance/january-24-2022/insurance-meeting
Xapo has informed DFS of its business decision to conclude its virtual currency business in New York. Effective January 11, 2022, Xapo surrendered its New York virtual currency license issued under 23 NYCRR Part 200. Xapo said: “Serving the U.S. market would require quite a lot of effort, time and investment, it would require a … Read more
NYDFS penalized Columbian Mutual Life Insurance Company for allegedly failing to comply with New York law concerning unclaimed life insurance proceeds. Enforcement takeaways: – Recent enforcement efforts continue focus on Insurance Industry. – Consent Order for failing to comply with New York law governing unclaimed life insurance proceeds. – Investigation found company failed to cross-check … Read more
A survey indicates compliance officers are increasingly concerned about unfair regulatory enforcement against individual compliance officers. Some findings: – 72% are concerned regulators expanded the role of compliance officers and the scope of their responsibilities in imposing personal liability. – 70% believe the overall compliance function at their firms is under resourced. – 35% reported … Read more
NYDFS has appointed Peter Marton as its new Virtual Currency Chief. He serves as Deputy Superintendent of the Research and Innovation Division. More here: https://www.coindesk.com/policy/2022/01/06/nydfs-hires-new-deputy-superintendent-of-virtual-currency/
NYDFS announced a $3 million settlement with Pacific Life Insurance Company for engaging in the pension risk transfer business in New York without being licensed. NYDFS maintains its long-term focus on penalizing financial companies that conduct business in New York without the necessary license; this is construed as an unfair competitive advantage by the regulator. The resolution may be found here:
https://www.dfs.ny.gov/system/files/documents/2021/12/ea20211221_co_pacific_life.pdf
Multi-Factor Authentication (MFA) is a core tenet of cybersecurity and recent NYDFS enforcement actions have highlighted such deficiencies. NYDFS issued guidance on compliance with Part 500 regarding MFA, an important read, which may be found here: https://www.dfs.ny.gov/industry_guidance/industry_letters/il20211207_mfa_guidance
Matthew Levine and Ilene Jaroslaw teamed up to discuss how the federal regulatory and prosecutorial enforcement focus is shifting to cryptocurrency exchanges. The article in the New York Law Journal is found here: New York Law Journal – Biden Administration Increasingly Focused on Crypto Exchanges – Nov 29 2021