September 17, NYDFS announcement He had extended his blockchain analyzes advice All the approved banks of New York State, credit cooperatives and branches and agencies of foreign banking organizations. As previously covered by infobytes, The NYDFS published advice in April 2022 describing best practices and expectations for its virtual currency license holders and New York limited use trust companies to implement “control measures that can take advantage of blockchain analysis”, increase reasonable diligence, carry out transactions and sanctions on monitoring the activity on chain.
The new letter from the industry said that banking organizations engaged in virtual currency activity or considering the 2022 analysis advice and considering taking advantage of blockchain analysis tools to improve compliance and risk management. NYDFS has highlighted use cases such as client portfolios, checking the source of incoming funds for virtual asset service providers and monitoring money laundering and sanctions offenses. The NYDFS stressed that the controls should be “adapted to the business model of a covered institution, to the appetite for risks and operations”.
The Superintendent Adrienne Harris said that “traditional banking institutions are developing in virtual currency activities, their compliance functions must adapt, to integrate new tools and technologies to mitigate new and different risks.” The letter from the industry has encouraged institutions to regularly reassess risk management frameworks and stressed that blockchain analysis tools can help protect the financial system by preventing illicit activities while virtual currency continues to proliferate in the broader financial system.
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