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 virtual currency wallet addresses.”
No details were provided by the agency, however. Nor is there any reference to prior guidance issued in 2018 by DFS concerning the policing of crypto fraud by DFS and expectations for regulated entities. It appears that regulated institutions will have to wait for further formal or informal guidance from the agency on this topic.