The New York State Department of Financial Services (NYDFS) has announced enhancements to its ability to detect illegal activities with virtual currency among the entities its regulates. The new capacities are part of its efforts to keep pace with the industry and respond proactively to the virtual currency market, it said. The NYDFS released a short statement on its new abilities on Feb. 21 that contained no specifics about the “new insider trading and market manipulation risk monitoring tools.” However, the statement promised: “The new enhancements will provide the Department with additional capabilities to detect potential insider trading, market manipulation, …

New York State’s Department of Financial Services, or NYDFS, reportedly received a complaint from stablecoin issuer Circle regarding Binance’s reserves prior to its crackdown on BUSD. According to a Feb. 13 Bloomberg report, Circle alerted NYDFS in an autumn 2022 complaint that Binance’s reserves were insufficient to support its tokens, seemingly including stablecoin Binance USD (BUSD). A person familiar with the matter reportedly said Circle’s team had uncovered the information through blockchain data. Circle’s actions came prior to the United States Securities and Exchange Commission’s plans to file a lawsuit against Paxos, claiming that BUSD was an unregistered security. NYDFS …

New York State’s Department of Financial Services is reportedly investigating cryptocurrency exchange Gemini over claims the firm made in regards to assets under its Earn lending program. According to a Jan. 30 report from Axios, the “New York State agency that regulates Gemini” — the Department of Financial Services handles firms falling under the states’ BitLicense regime, including the crypto exchange — was investigating following reports many users believed assets in their Earn accounts had been protected by the Federal Deposit Insurance Corporation, or FDIC. The government agency previously issued cease and desist orders to five crypto firms making similar …

The New York Department of Financial Services, or NYDFS, has released guidelines on how licensed crypto firms should handle customer assets should they face “insolvency or similar proceeding”. In a Jan. 23 announcement, NYDFS superintendent Adrienne Harris said crypto firms and exchanges operating under a BitLicense — required in New York state — should segregate corporate funds from users’ virtual currency holdings both on-chain and in the “internal ledger accounts” of the company’s custodian. According to the regulator, crypto firms are expected to hold users’ assets “only for the limited purpose of carrying out custody and safekeeping services”: “A [virtual …

The New York state Department of Financial Services (DFS) released guidance on Dec. 15 for regulated banks seeking to engage in activities with virtual currency. The guidance, which took effect immediately, describes the application process and “summarizes the types of information the Department considers relevant” for obtaining the agency’s approval. The 11-page document consisted largely of bullet points as it described the informational requirements for several categories, such as “Business Plan” and “Consumer Protection,” in detail, followed by a series of formal checklists. Approval is required 90 days before engaging in activities, the document reminded. Approval for prior activities “does …

Kathy Hochul, the governor of New York — who has been in office for only a week since the departure of Andrew Cuomo — has nominated Adrienne Harris to lead the state’s Department of Financial Services. According to a Tuesday Wall Street Journal report, Hochul tapped Harris to lead the New York Department of Financial Services, or NYDFS, following the resignation of Superintendent Linda Lacewell. Harris is currently a senior adviser at the public relations firm Brunswick Group, but prior to that was a special assistant for economic policy to United States President Barack Obama and a senior adviser to …

Major American digital asset custody and security company BitGo has acquired a New York Trust license from the New York State Department of Financial Services. According to an announcement, the new charter enables BitGo to provide custodial services for institutional clients in New York seeking to make large investments in crypto in compliance with local regulations. With the new license, BitGo will provide Know Your Customer and Anti-Money Laundering controls and offer offline cold storage of cryptographic keys in bank-grade vaults, BitGo said. BitGo CEO Mike Belshe said that the new trust charter from NYDFS will help the company serve …

New York's financial regulator is asking for new tools to gather real-time financial data. On Thursday, the New York Department of Financial Services announced new details of its coming "techsprint" competition: "The objective of the techsprint is to achieve creative and collaborative prototyping as a step toward smarter regulatory reporting in virtual currency." Namely, the DFS is using the two-week competition to get better access to data from crypto companies in real time. It's first question reads: "How can DFS achieve real-time or more frequent access to company financial data from virtual currency licensees and receive early warning signs of …

New York has given the first authorization to a stablecoin backed by the Japanese yen to operate in the United States. Per a Tuesday announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.-dollar and yen-backed stablecoins in New York. Given New York's status as a global center, the NYDFS is the most prominent state financial regulator in the United States — it is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. GMO's charter is as a limited liability …

Stablecoin creator and crypto services provider Paxos filed an application to open a national bank on Wednesday. If approved, the pioneering Paxos General Trust will be headquartered in New York, licensed to hold cryptocurrencies and execute the duties of a regular trust bank. According to a blog post on the Paxos website, being granted a national trust bank charter from the U.S. government would broaden both the range of services offered by the company and the geographic area to which it can offer services: “Our mission is to modernize financial market infrastructure and enable the movement of any asset, any …

A line from immortal comic strip Calvin & Hobbes goes “a good compromise leaves everybody mad.” When it comes to laws governing crypto, authorities are usually asking for pretty major compromises because they are, at their very best-intentioned, trying to work things out. While it’s a fast-developing area of law — honestly a treat to cover — that means it’s fast-developing relative to law, not tech. There is an innate conservatism to anything having to do with how people handle their money. That extends to laws governing how money and investments function. Consequently, everything regulators touch in crypto develops slower …

Earlier today, PayPal confirmed that it would be adding crypto payments to its global platform over the coming months. The rollout will begin in the United States, where PayPal also became the first recipient of the New York Department of Financial Services', or NYDFS, conditional Bitlicense, a program that the regulator announced this past summer. The devil in the details While the news is huge for crypto, PayPal will be under intense scrutiny. The nature of the conditional Bitlicense is that conditional licensees have to pair off with firms that have full Bitlicenses (in this case, Paxos) that will act …