Compliance

NYDFS PENALIZES CROSS-BORDER PAYMENTS TRANSMITTER “PAYONEER” $1.25 MILLION FOR OFAC COMPLIANCE DEFICIENCES

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Enforcement takeaways from the Consent Order (per DFS allegations): •   After doing a lookback, Payoneer discovered it had engaged in approximately $793,000 worth of transactions with persons or entities in sanctioned countries during the period Iran, Sudan, Syria and individuals on the SDN List between 2013 and 2018 •   Payoneer self-disclosed these violations to OFAC, which settled … Read more

NYDFS INTEGRAL TO NY STATE NEW CYBERSECURITY STRATEGY

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According to the strategy released by New York governor Kathy Hochul: “Financial Sector[:] In 2017, the New York State Department of Financial Services (DFS) became the first banking or insurance regulator in the nation to establish a cybersecurity division to protect consumers and industries from cyber threats. DFS also created first-in-the-nation requirements for DFS-regulated banks, … Read more

NYDFS $1.35 MILLION CYBERSECURITY ENFORCEMENT ACTION AGAINST WEALTH MANAGER SA STONE

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NYDFS entered into a Consent Order for alleged cybersecurity violations against wealth management firm SA Stone, which sells insurance products to customers.  According to DFS allegations: •        SA Stone is an independent broker/dealer focusing on wealth management, holding licenses to sell insurance to its customers in New York. •        SA Stone experienced several reportable cybersecurity breaches arising … Read more

NYDFS SUPERINTENDENT HARRIS TESTIFIES BEFORE CONGRESS

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FROM NYDFS SUPERINTENDENT HARRIS’ PREPARED TESTIMONY BEFORE US SENATE BANKING COMMITTEE ON DFS REFORMS FOLLOWING BANKING CRISIS: “DFS has been monitoring the liquidity of [high risk] institutions on a daily basis, which entails frequent engagements with these institutions, as well as close coordination with our federal counterparts. . . . I directed DFS’s Office of … Read more

NYDFS PROPOSES NEW GUIDANCE ON VETTING BANKING OFFICERS AND DIRECTORS

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according to the proposed guidance: ·  “Covered Institutions are expected to update and modernize their policies and procedures to require vetting of Designated Persons—including senior officers and members of any governing board—both at onboarding and on a regular ongoing basis, to ensure a robust initial vetting and to confirm that no new circumstances or conflicts … Read more

NYDFS VIRTUAL CURRENCY CHIEF PETER MARTON TESTIFIES BEFORE NY SENATE BANKING COMMITTEE

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DFS Virtual Currency Peter Marton testified on April 25 before the New York Senate Banking Committee.   Some takeaways from his testimony: •   Virtual currency division has hired 40 new staff since Jan. 2022, with total reports of 57 •   The application backlogs remains; DFS has granted four BitLicenses in last 15 months •   The application queue remains high, but … Read more

NYDFS SUPERINTENDENT HARRIS CALLS FOR “REAL TIME” REGULATION OF CRYPTO

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NYDFS Superintendent Harris has called for “real time” regulation of crypto, according to Axios: “Harris appears to want to tighten the screws on crypto regulation, with what she’s calling: “real-time supervision.” “This idea that regulators should just come in once a year, go through books and interview staff … was fitting maybe for the 20th-century … Read more

NYDFS SUPERINTENDENT HARRIS SAYS CRYPTO INDUSTRY COMPLIANCE MUST STILL MATURE

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At the Chainalysis Links 2023 conference, the WSJ reported that Superintendent Harris stated that the crypto industry must still mature in compliance: “Speaking more broadly about the crypto industry, Ms. Harris said the sector still lacks maturity in its compliance programs even as it has grown in prominence. During many of the NYDFS’s examinations and … Read more

NYDFS PENALIZES BITPAY $1 MILLION FOR BSA/AML/CYBERSECURITY VIOLATIONS

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NYDFS penalized payment platform Bitpay for alleged violations of its regulations governing BSA/AML requirements and cybersecurity obligations.  Here are some hot takes from DFS’ allegations set forth in its Consent Order: •    Bitpay provides a payment platform for merchants wanting to receive Bitcoin payments; •    Bitpay conducted only one cybersecurity risk assessment over a 4-year period; •    Bitpay … Read more

DOJ COMMITS TO DIVERSITY IN SELECTING MONITORS

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According to a new policy memo to be adopted in the U.S. Justice Manual, “[c]onsistent with the Criminal Division’s approach for the past several years, as well as recent Department-wide guidance, any submission or selection of a monitor candidate by either the Company or the Criminal Division should be made in keeping with the Department’s … Read more