Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
NYDFS has announced that it has taken steps to increase its ability to detect virtual currency fraud. In a press release, DFS stated: “The new enhancements will provide the Department with additional capabilities to detect potential insider trading, market manipulation, and front-running activity associated with Department-regulated entities’ and applicants’ exposure or potential exposure to listed … Read more
According to Forbes [HERE]: “According to a source familiar with Paxos, the company was not aware that Binance intended to manually port the token [BUSD] onto other blockchains. When these revelations came to light, the DFS held multiple meetings with the company in January. The source said, ‘I can say with absolutely 100% confidence that … Read more
NYDFS has adopted a new Community Reinvestment Act regulation. It has been looking at the issue for quite some time. According to DFS the final regulation details how institutions must collect and submit data while abiding by fair lending laws. Banks will be required to report to DFS details of applications, such as: • whether the … Read more
This is what it looks like as digital asset firms reach for normative compliance: Anchorage Digital Bank, a crypto-focused bank, has responded to sharp criticism from the OCC, its regulator, with a series of hires showing real depth in BSA/AML/OFAC compliance. Anchorage Digital, the first digital asset bank to be issued a charter by the … Read more
In 2012, the New York State Department of Financial Services (DFS) made a regulatory splash when it imposed a two-year monitorship on Standard Chartered Bank as part of an enforcement action. One commentator noted that the DFS settlement with Standard Chartered had “upended the regulatory dynamics of the international banking world” with this “staggering” resolution. … Read more
As noted in Part One of this article [LINK HERE: NYLJ11292022562493 DFSReporting Part One], issuance of the second “Monaco Memo” by the U.S. Department of Justice in October 2022 sparked debate anew about the self-reporting of misconduct by corporations. Settlements between the Justice Department and several large companies since then have brought greater clarity to … Read more
NYDFS issued an enforcement action against Coinbase Inc., alleging a variety of compliance failures. Some details: – $50MM penalty; $50MM commitment spend on compliance; Continuation of Independent Monitor – “During much of the relevant period, Coinbase’s KYC/CDD program, both as written and as implemented, was immature and inadequate. Coinbase treated customer onboarding requirements as a … Read more
In a joint statement of the FRB, OCC and FDIC, the lead federal banking regulators continued in a posture of wariness towards cryptocurrency: “Based on the agencies’ current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized … Read more
NYDFS has issued new guidance for banks on climate risk. This follows on initial guidance issued for banks on climate risk in 2020. According to DFS: “A Regulated Organization’s board of directors and management are expected to care for the organization’s operational resilience and safety and soundness on an ongoing basis and with respect to … Read more