New York State Regulator Publishes Cryptocurrency Guidelines For Banks

According to media reported on December 15 that the New York State Department of Financial Services issued immediate effective digital asset guidelines to banks regulated by the state on the same day, stipulating that financial institutions must submit a business plan containing details of the proposed activity before being approved to engage in relevant virtual currency activities, and detail how such services will affect the bank’s capital and liquidity and need to be at least in advance 90 days of filing. It is understood that the guidance is one of the clearest ways for banks to provide cryptocurrency services to date. According to an industry letter from the regulated agency, the regulator will conduct a “comprehensive assessment” of the information requested from banks in the guidance to determine whether the bank is permitted to engage in proposed cryptocurrency-related activities. This may include securing cryptocurrencies on behalf of customers or providing certain digital assets to customers, etc. In this regard, the director of the New York State Department of Financial Services said that this new policy is critical to protecting consumers’ money and ensuring that banks regulated by New York State remain competitive. Previously, FTX, one of the largest cryptocurrency exchanges, filed for bankruptcy on November 11, causing turmoil in the cryptocurrency market. Its founder and former chief executive, Sam Bankman- Fried, was charged Tuesday by federal prosecutors with embezzling billions of dollars and violating campaign finance laws..