Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
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
Rep. Ritchie Torres said today that he would not support legislation that preempts NYDFS’ powers to regulate cryptocurrency or otherwise encroaches on New York’s sovereignty in regulating financial services. [Video here]. He made these comments today at the House Financial Services Committee hearing today on stablecoins, at which Superintendent Harris testified. Other takeaways from today’s … Read more
According to Fortune: “For the eight months—from April 29 to Dec. 27, when Olson joined the company—SVB went without an established chief risk officer, the company’s risk senior leadership held the responsibilities of the role.” Arguably, not a best practice.
“41 percent of respondents in Compliance Week’s annual ‘Inside the Mind of the CCO’ survey said they don’t believe the DOJ’s CCO certification requirement to be a positive development for the profession,” according to Compliance Week. This report comes at the same time that the OCC is that compliance risk remains “elevated” in its Semiannual … Read more
OFAC issued an enforcement action against the U.S.-based crypto exchange Kraken. What is perhaps most striking is how this matter is much more like the run-of-the-mill OFAC enforcement action against a mature financial institution, and not a start up. Key language from OFAC: “This case also demonstrates the value of a company implementing robust remedial … Read more
Law360 reports that NASDAQ will be jumping into the crypto custody business for institutional investors. NYDFS will be reviewing their application, according to Law360. Coindesk reporting on this may be found here: https://www.coindesk.com/business/2022/09/20/nasdaq-starts-crypto-custody-services-for-institutional-clients/
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
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/