Today, the New York State Financial Services Department (NYDFS) has published new guidelines, explicitly extending expectations concerning the use of blockchain analysis tools by banking organizations in New York which are already considering virtual activities related to currencies.
Here is a ventilation of what guidelines require, why this counts and how the institutions can respect it.
What Nydfs says
Superintendent Adrienne A. Harris stressed that, as more and more banks are entering or extending virtual money activity, their compliance programs must adapt to mitigate new or evolution risks. More specifically, NYDFS expects banking organizations to plan to incorporate blockchain analysis as an additional risk management tool that complies and increases existing control programs. NYDF have called certain specific use cases where blockchain analysis can help provide valuable information, in particular:
In short: NYDFS reports that banks cannot deal with virtual / virtual active active / active service services (Vasp) as marginal issues that can be attenuated with existing tools and processes. They expect proactive identification of risks, integrated controls and continuous monitoring.
Why this counts
- Regulatory alignment and risk exposure: Since banks obtain greater exposure to cryptography (via customers, counterparties, product offers), untreated gaps can cause regulatory, financial or reputation risk.
- Expectations: Directives clearly indicate that the blockchain analysis is not optional if you do a virtual currency activity in New York – It is planned.
- Reasonable diligence and documentation: You not only need tools; You need policies, process, thresholds and surveillance in place – and to be able to show them.
{{Calllout-nydfs-Blockchain-Analytics-Expectations-1}
Blockchain Analytics is now non -negotiable
NYDFS directives indicate a clear thing: for banks operating in New York, blockchain analyzes are no longer on the sidelines – this is an essential element of conformity if you perform a virtual currency or an adjacent VASP company.
At TRM Labs, our mission is to help financial institutions meet this type of supervision expectations – providing tools, workflows and executives that make the cryptographic risk visible, manageable and defensible.
If you want to see how your program aligns about the advice of Nydfs, our Crypto compliance program guide for financial institutions is an excellent resource against which comparison.
