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 right this moment’s steerage is part of the state’s broader makes an attempt to manage cryptocurrency. She stated:
“[The Department of Financial Services’] digital forex regulation has protected New Yorkers since 2015. At present’s steerage reminds DFS-regulated digital forex corporations of our expectations relating to the safekeeping of buyer property.”
The primary suggestion superior in right this moment’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 clients.
Particularly, company and buyer property ought to be held in separate on-chain wallets, although particular person buyer accounts will be mixed into an omnibus account. The 2 teams of property must also be handled individually throughout accounting.
At present’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 celebration. Custodians ought to disclose all related phrases and circumstances.
This steerage is explicitly meant to guard clients in case a service turns into bancrupt. It is usually 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 consumer deposits along with 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 may even deal with anti-money laundering guidelines this yr.
At present’s steerage applies to corporations which can be permitted to offer custody in New York, which is acknowledged for its strict regulatory stance towards crypto. So far, simply 31 companies have obtained both the state’s BitLicense or its Restricted Goal Belief Constitution.