Recent developments about the New York State Department of Financial Services
(Not affiliated with NYDFS; just a blog.)
According to an interview given by NYDFS Superintendent Adrienne A. Harris to the Wall Street Journal, NYDFS will release guidance for regulated banks that interact with customers handling crypto or want to engage in the business themselves. Superintendent Harris to WSJ: “Where some regulators have said, “No, banks, don’t engage in this at all,” we’ve … Read more
FinCEN and OFAC teamed up to issue parallel enforcement actions against crypto exchange Bittrex, Inc. for alleged violations of BSA/AML and OFAC regulations, with penalties of $29 million and $24 million being issues, respectively. Previously in 2019, NYDFS had rejected Bittrex’s application for a license to operate in New York, finding amount other things that … Read more
Matthew Levine spoke about Monitorships and the latest USDOJ Monaco Memo at the American Bar Association Criminal Justice Section Tenth Annual #ABA London #WhiteCollar Institute. Also on the panel were experts Vincent DiCianni Christine Braamskamp Audrey Harris and the Honorable Robert Buckland. A video of the panel is here: https://www.youtube.com/watch?v=uG14Z7s7xzY
NYDFS issued an enforcement action against Rhinebeck Bank for alleged fair lending violations. Rhinebeck paid a $950,000 penalty. From the NYDFS findings: “The Department’s investigation found that Rhinebeck’s practices resulted in minority borrowers paying higher interest rates than non-Hispanic white borrowers for their automobile loans, without regard to their creditworthiness….Although the Department did not find … Read more
NYDFS Superintendent Adrienne A. Harris spoke to the Times Union newspaper about the regulatory reach of the agency and challenges in staffing: “[Harris] spent the first six months on the job conducting a staff analysis, prompting her to conclude that the agency is understaffed, especially considering its regulatory reach.” More on the interview in the … 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/
Deputy Attorney General Lisa Monaco announced needed reforms and important updates to corporate criminal enforcement policies including for monitorships. New guidance will seek transparency and consistency in how to identify, select and oversee monitors. Documented selection process and program will be oriented to tailor work plans to identified deficiencies. Aim is to keep Monitorship on … Read more
As the Eth merge occurred, NYDFS issued guidance about this token: “With Ethereum’s protocol change complete, #NYDFS continues to recognize Ether (ETH) under our Greenlisted Coins/Tokens List.” The guidance may be found here on Twitter: https://twitter.com/NYDFS/status/1570430059000856577?s=20&t=mE8Rl2KoyZDyjnsO0Kclag
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
Crains New York, a business journal, held a panel on the future of crypto in New York: “As yet, it is unclear if New York’s brand of oversight will attract crypto companies or send them elsewhere to set up shop. ‘It depends whether they recognize how valuable a seal of approval from New York state … Read more