The New York Division of Monetary Companies (NYDFS) beneficial on Jan. 23 that custodians ought to segregate buyer and company crypto property.
Superintendent Adrienne A. Harris advised that at present’s steerage is part of the state’s broader makes an attempt to manage cryptocurrency. She stated:
“[The Department of Financial Services’] digital foreign money regulation has protected New Yorkers since 2015. Right now’s steerage reminds DFS-regulated digital foreign money firms of our expectations relating to the safekeeping of buyer property.”
The primary advice 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 also needs to be handled individually throughout accounting.
Right now’s steerage additionally specifies that the custodian ought to have restricted curiosity in property: custodians ought to maintain all property solely for safekeeping and shouldn’t enter a debtor-creditor relationship. Custodians can, nonetheless, make sub-custody preparations with a 3rd occasion. Custodians ought to disclose all related phrases and situations.
This steerage is explicitly meant 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 at the side of Alameda Analysis. Harris referred to as that occasion “well timed” however asserted that the NYDFS had deliberate to launch steerage on the matter for a while.
Harris stated that the NYDFS plans to launch upcoming steerage on stablecoins, promoting, and disclosures. The company can even concentrate on anti-money laundering guidelines this 12 months.
Right now’s steerage applies to firms which can be permitted to supply custody in New York, which is acknowledged for its strict regulatory stance towards crypto. To this point, simply 31 corporations have obtained both the state’s BitLicense or its Restricted Objective Belief Constitution.
