The New York Division of Monetary Providers (NYDFS) advisable on Jan. 23 that custodians ought to segregate buyer and company crypto property.
Superintendent Adrienne A. Harris prompt that at present’s steerage is part of the state’s broader makes an attempt to control cryptocurrency. She mentioned:
“[The Department of Financial Services’] digital foreign money regulation has protected New Yorkers since 2015. Immediately’s steerage reminds DFS-regulated digital foreign money firms of our expectations concerning the safekeeping of buyer property.”
The principle suggestion superior in at present’s steerage is the segregation of crypto accounts. The NYDFS means that an organization’s custodian ought to individually handle company property and digital currencies deposited by prospects.
Particularly, company and buyer property needs to be held in separate on-chain wallets, although particular person buyer accounts might be mixed into an omnibus account. The 2 teams of property must also be handled individually throughout accounting.
Immediately’s steerage additionally specifies that the custodian ought to have restricted curiosity in property: custodians ought to maintain all property solely for safekeeping and mustn’t enter a debtor-creditor relationship. Custodians can, nevertheless, make sub-custody preparations with a 3rd get together. Custodians ought to disclose all related phrases and situations.
This steerage is explicitly supposed to guard prospects in case a service turns into bancrupt. It’s also meant to stop the co-mingling of funds.
Harris advised Reuters that the newly-announced steerage was not particularly motivated by the collapse of FTX, which noticed the corporate mismanage funds and person deposits along with Alameda Analysis. Harris known as that occasion “well timed” however asserted that the NYDFS had deliberate to launch steerage on the matter for a while.
Harris mentioned that the NYDFS plans to launch upcoming steerage on stablecoins, promoting, and disclosures. The company will even deal with anti-money laundering guidelines this yr.
Immediately’s steerage applies to firms which might be permitted to offer custody in New York, which is acknowledged for its strict regulatory stance towards crypto. Thus far, simply 31 corporations have obtained both the state’s BitLicense or its Restricted Function Belief Constitution.