This US State Takes New Step For Crypto Regulation – Crypto News – Crypto News
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This US State Takes New Step For Crypto Regulation – Crypto News

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3 years ago

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Following the alleged co-mingling of funds at the defunct cryptocurrency exchange ftx and its associated financial firm Alameda Research, which resulted in significant losses for customers — the chief financial regulator in the state of new york is about to release new guidance on Monday that will dictate that companies separate the crypto assets of their customers from their own.

New Crypto Guidelines

The advisory is the most recent in a string of crypto-related directives that the New York State Department of Financial Services (NYDFS) has published over the course of the past year. Back in 2022, the world witnessed a market crash that reduced the value of crypto coins by around $1.3 trillion in 2022. The breakdown caused the failure of cryptocurrency companies such as FTX and Celsius Networkthe most recent of which was Genesis Global Capitalthe lending section of which filed for protection under the bankruptcy laws of the United States on Thursday.

Additionally, state-regulated businesses must tell customers how they account for their customers’ digital money, according to the NYDFS, one of the few state agencies with such a regulatory structure in place. It comes at a time when federal regulators including the United States Commodity Futures Trading Commission (CFTC) are raising concerns about the absence of consumer protections in the cryptocurrency industry. There are several restrictions placed on the actions that federal agencies such as the CFTC can take since Congress has not passed legislation that grants them extra jurisdiction.

Crypto At Crossroads Of Regulation

The state of New York mandates that businesses go through audits to determine whether or not they are in compliance with state regulations on KYC policies, anti-money laundering safeguards, and capital requirements. Examinations of cryptocurrency businesses are uncommon in the majority of other states.

Adrienne Harris, the superintendent of NYDFS, was quoted as saying:

It’s timely, but truth be told, it was something we had on our policy roadmap even before FTX

Harris, a former senior counselor at the US Treasury Department who was confirmed as superintendent last year, has spent most of her first year in the position enhancing her agency’s attention on cryptocurrency. According to her, the NYDFS virtual currency arm has close to 50 people and is currently looking to expand.

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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