Cryptocurrency

ROBINHOOD REVISITED: A KEY TAKEAWAY FROM THE RECENT NYDFS ENFORCEMENT ACTION CONCERNING NYDFS’ VIEW OF ITS JURISDICTION

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The scope of NYDFS jurisdiction is an oft-debated issue for regulated and non-regulated entities alike. To better understand how NYDFS views its jurisdiction and mission, its worth re-reading these findings from its Consent Order against  Robinhood Crypto. “[I]t is worth beginning with the Department’s observation that RHC’s overall approach to its compliance obligations substantially contributed … Read more

NYDFS FINES ROBINHOOD CRYPTO $30 MILLION FOR BSA/AML AND CYBERSECURITY VIOLATIONS

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NYDFS has issued its first enforcement action against one of its regulated cryptocurrency entities.  Enforcement takeaways: $30 million penalty is significant. Alleged violations include BSA/AML; Cybersecurity; Reporting; and Consumer Protection. The Department alleged adequate resources were not devoted to RHC’s compliance programs, particularly as it grew, which exacerbated compliance issues. Robinhood improperly certified compliance with … Read more

FDIC HAS BEGUN REGULATORY INVESTIGATIONS OF CRYPTO FIRMS

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THE FDIC has joined the party, commencing investigations and issuing cease and desist letters for what it deems are misrepresentations concerning the applicability of FDIC insurance to the accounts of crypto customers. Other regulatory investigations of recent crypto firm failures include some state banking regulators/AGs. More on this from Coindesk:   https://www.coindesk.com/policy/2022/07/07/fdic-probing-voyager-claims-it-was-insured-by-regulator-report/ https://www.coindesk.com/policy/2022/07/28/crypto-lender-voyager-ordered-by-us-regulators-to-stop-misleading-customers/    

OFAC APPEARS TO BE RAMPING UP ENFORCEMENT IN THE CRYPTO SPACE

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According to reporting from Coindesk, OFAC appears to be ramping up enforcement in the crypto space — mentions of Kraken and Binance. See article here:  https://www.coindesk.com/policy/2022/07/26/kraken-under-investigation-for-alleged-sanctions-violations-report/?utm_source=Sailthru&utm_medium=email&utm_campaign=FIRST%20MOVER%20JULY%2027%202022&utm_term=First%20Mover

NYDFS SUPERINTENDENT HARRIS INDICATES NFT GUIDANCE FORTHCOMING

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At an ACAMS conference NYDFS Superintendent Adrienne A. Harris stated that guidance on non-fungible tokens — NFTs — will be forthcoming. “You will continue to see leadership from DFS in virtual currency,” Harris said, adding that the regulator intended to advise the financial sector on non-fungible tokens,” A Financial News article covering the discussion is … Read more

NYDFS ISSUES FIRST-IN-THE-NATION STABLECOIN GUIDANCE

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Its finally here:  first-in-the-nation stablecoin guidance for regulated cryptocurrency entities.  Some highlights: Backing and Redeemability: The stablecoin must be fully backed by a Reserve of assets, meaning that the market value of the Reserve is at least equal to the nominal value of all outstanding units of the stablecoin as of the end of each … Read more

NYDFS SUPERINTENDENT HARRIS SAYS “REGULATORS NEED TO DEVELOP A ’21ST CENTURY FRAMEWORK’ FOR CRYPTO”: AT LINKS 2022 CONFERENCE

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At the Links 2022 Conference, NYDFS Superintendent Adrienne A. Harris stated that “the regulatory agency will triple the size of its virtual currency unit by the end of the year.” Its ambitious — but much needed. Superintendent Harris “said her agency is working to hire additional staff and update its guidance to better deal with … Read more

NYDFS ISSUES GUIDANCE ON USE OF BLOCKCHAIN ANALYTICS BY REGULATED CRYPTO FIRMS

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NYDFS issued guidance concerning the use of blockchain analytics by regulated cryptocurrency firms.  NYDFS stated:  “The purpose of this guidance … is to emphasize to all virtual currency business entities that are either licensed under 23 NYCRR Part 200 or chartered as a limited purpose trust company … the importance of blockchain analytics to effective policies, … Read more

“CRYPTO’S MOST POWERFUL REGULATOR IS HERE”: NYMAG.COM ON NYDFS SUPERINTENDENT ADRIENNE A. HARRIS

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In an in-depth look at NYDFS Superintendent Adrienne A. Harris, titled, “Crypto’s Most Powerful Regulator is Here,” New York Magazine (nymag.com) elicits important information concerning her vision and approach to cryptocurrency regulation is included, including her view that NYDFS may attempt to regulate DEFI “lending and asset management.” The article may be found here:  https://nymag.com/intelligencer/2022/03/adrienne-harris-is-cryptos-most-powerful-regulator.html