Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
More from Fortune on the proposed legislation from the NYAG and an apparent rift with NYDFS. But what does this mean for passage/enactment? From the Forbes article: “Another point of contention has turned on the extent to which DFS was consulted in the drafting of the bill. Among the endorsements for the legislation in the … Read more
Advancing a key agenda item from the the last several administrations, DFS has published aggregate gender and racial/ethnic data of board members and senior management for regulated banks, non-depository institutions, and insurance companies. According to DFS, it collected the data from insurance companies with more than $100 million in 2019 New York premiums, regulated banks … Read more
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
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 issued an enforcement action against bitFlyer USA, Inc., a cryptocurrency exchange, obtaining a $1.2 million penalty. Takeaways from DFS allegations: • No specific cyber event was involved – enforcement was based on violations identified over two examination cycles • This suggests cybersecurity is now well integrated into the DFS examination process • Core violations included the lack … Read more
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
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
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 Superintendent Harris has called for “real time” regulation of crypto, according to Axios: “Harris appears to want to tighten the screws on crypto regulation, with what she’s calling: “real-time supervision.” “This idea that regulators should just come in once a year, go through books and interview staff … was fitting maybe for the 20th-century … Read more
At the Chainalysis Links 2023 conference, the WSJ reported that Superintendent Harris stated that the crypto industry must still mature in compliance: “Speaking more broadly about the crypto industry, Ms. Harris said the sector still lacks maturity in its compliance programs even as it has grown in prominence. During many of the NYDFS’s examinations and … Read more