Regulations

NYDFS SEEKS COMMENT ON ARTIFICIAL INTELLIGENCE GUIDANCE FOR INSURANCE CARRIERS

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•   DFS has issued draft guidance that “outlines DFS’s expectations for how insurers develop and manage the integration of external consumer data and information sources (‘ECDIS’), artificial intelligence systems (‘AIS’), and other predictive models to mitigate potential harm to consumers.” •   According to DFS: “The use of external consumer data and information sources (‘ECDIS’) and artificial intelligence systems … Read more

NYDFS DRAMATICALLY TRIMS GREENLISTED COINS AND ISSUES PROPOSED GUIDANCE ON REVISED COIN LISTING POLICY

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In conjunction with its proposed guidance, DFS has significantly trimmed “Greenlisted” coins. It has cut the list to Bitcoin, Ethereum, and several stablecoins. Until recently it had Greenlisted approximately two dozen coins. These changes are part of the Department’s initiative seeking to strengthen DFS oversight of virtual currencies, which include new guidance coin listing and … 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

NY ATTORNEY GENERAL INTRODUCES SWEEPING CRYPTO LEGISLATION

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Here are some quick impressions: •   Provides expansive new authority to the NYAG to regulate and enforce in the crypto market •   Appears to codify the DFS BitLicense, which is now set by regulation •   Sets up competing enforcement regimes and specifically contemplates conflict by requiring the “attorney general and the [DFS] superintendent shall cooperate, coordinate and assist … 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 ADOPTS REGULATION ON CRYPTO FIRM ASSESSMENTS

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Superintendent Harris announced today final adoption of the assessment regulation. Quick takeaways: •   The adopted regulation effectuates legislation in the NYS FY23 Budget giving DFS authority to collect supervisory costs from licensed virtual currency businesses, similar to other licensees regulated by DFS. •   Says DFS: “As stewards of others’ assets, virtual currency entities play an important role in the … Read more

NYDFS ASSERTS STRONGER ABILITY TO DETECT VIRTUAL CURRENCY FRAUD

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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

MORE ON THE MYSTERY OF THE BUSD DEMISE AND NYDFS

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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 ORDERS PAXOS TO CEASE ISSUING THE BUSD STABLECOIN

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DFS has ordered Paxos to stop issuing BUSD stablecoin, one of the most widely held and traded. According to DFS:  “DFS has ordered Paxos to cease minting Paxos-issued BUSD as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance through Paxos-issued BUSD. In response, on February 13, 2023, Paxos … Read more