1 min read
FTX-style co-mingling is addressed in new guidance from New York
According to new guidance released by the New York State Department of Financial Services (NYDFS), cryptocurrency companies must separate customer and company assets
By: Flagship Team
According to Reuters, the state's top financial regulator is pushing new regulations regarding the mixing of funds. The decision was made in response to the demise of US-based trading firm Alameda Research and exchange FTX, which cost their clients billions of dollars. State-regulated businesses must also explain to customers how they account for their clients' assets under the new guidance.
The NYDFS has been busy over the past year as one of the few states scrutinizing crypto firms more closely. The organization has been working to bolster its resources, adding to its already 50-strong virtual currency unit, and has issued several directives to an industry still reeling from the market collapse in 2022. With more personnel, the regulator will be better able to maintain know-your-customer (KYC) and anti-money-laundering (AML) regulations for the state's crypto-related businesses.
NYDFS Superintendent Adrienne Harris said regarding the new plan,
“It’s timely, but truth be told, it was something we had on our policy roadmap even before FTX. DFS’s virtual currency regulation has protected New Yorkers since 2015. Today’s guidance reminds DFS-regulated virtual currency companies of our expectations regarding the safekeeping of customer assets.”
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