NY financial regulator upgrades monitoring tools against crypto fraud

Rick Steves

“These tools will help us combat financial crime and fraud, hold regulated entities accountable, and further strengthen our national leadership in virtual currency supervision.”

New York State Department Of Financial Services has strengthened its ability to detect fraud in the virtual currency industry by building on previous guidance on preventing wrongful activity.

Its enhanced ability to identify insider trading and market manipulation in New York State-regulated companies engaged in virtual currency activity comes at a time when the crypto industry remains under pressure after the collapse of big names such as Celsius Network, Terra/LUNA, and FTX.

“Tools will help us combat financial crime and fraud”

The New York regulator has stepped up its capabilities with new insider trading and market manipulation risk monitoring tools. The NYDFS will leverage the technology to detect potential insider trading, market manipulation, and front-running activity associated with Department-regulated entities’ and applicants’ exposure or potential exposure to listed virtual currency wallet addresses.

New York State Department Of Financial Services Superintendent Adrienne A. Harris commented: “This is a significant step in our supervision of the virtual currency industry as it continues to quickly transform and mature. These tools will help us combat financial crime and fraud, hold regulated entities accountable, and further strengthen our national leadership in virtual currency supervision.”

The announcement builds upon recently issued Guidance regarding the use of blockchain analytics, criteria for USD-backed stablecoins, and new guidance regarding virtual currency insolvency or similar proceeding.

The guidance applies to those entities the Department has licensed or chartered to custody, or temporarily hold, store, or maintain virtual currency assets on behalf of their customers.

As stewards of others’ assets, virtual currency entities that act as custodians, including without limitation, storing, holding, or maintaining custody or control of virtual currency on behalf of others, must have robust processes in place, akin to traditional financial service providers.

New York’s virtual currency regulation requires entities to, among other things:

  • hold virtual currency in a manner that protects customer assets;
  • maintain comprehensive books and records; properly disclose the material terms and conditions associated with their products and services, including custody services;
  • and refrain from making any false, misleading or deceptive representations or omissions in their marketing materials.

Entities operating under the BitLicense and Limited Purpose Trust Charter are held to these requirements through DFS supervision and examinations, or when need be, enforcement actions.

Read this next

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

<