New York financial regulator issues cryptocurrency guidance for banks – Reuters

[1/2] Representations of cryptocurrencies plunge into water in this illustration taken, May 23, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Dec 15 (Reuters) – The New York State Department of Financial Services (NYDFS) on Thursday issued digital asset guidance to state-regulated banks laying out what information financial institutions must submit before getting approval to engage in virtual currency-related activities.
The guidance, one of the clearest paths forward yet for banks to offer cryptocurrency services, instructs banks to submit a business plan with details of the proposed activity, detail how such a service would impact the bank's capital and liquidity and inform NYDFS of its plans at least 90 days beforehand.
In a statement, NYDFS Superintendent Adrienne Harris said the new policies are "critical to ensuring that consumers’ hard-earned money is protected" and that New York-regulated banks remain competitive.
The regulator will “make a comprehensive assessment” of the information presented under the guidance to determine whether a bank should be permitted to engage in a proposed crypto-related activity, according to an industry letter sent Thursday to regulated institutions.
Such activities could include safeguarding cryptocurrency on behalf of customers or offering clients exposure to certain digital assets.
As part of the business plan banks are expected to submit to NYDFS, banks should detail a comprehensive risk assessment for the service they wish to engage in, as well as expected costs of the project and what relevant consumer protection policies will apply.
The guidance is effective immediately, NYDFS said.
It follows a tumultuous month for cryptocurrencies, sparked by the collapse of FTX, one of the largest crypto exchanges, which filed for bankruptcy Nov. 11. Its founder and former chief executive officer Sam Bankman-Fried was charged by federal prosecutors on Tuesday with misappropriating billions of dollars and violating campaign finance laws.
Our Standards: The Thomson Reuters Trust Principles.
U.S.-based cryptocurrency exchange Coinbase Inc has reached a $100 million settlement with New York's Department of Financial Services (DFS), the exchange and the regulator said in statements on Wednesday.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved

source