Based on a Cointelegraph report, the New York State Department of Financial Services (NYDFS) has announced capacity enhancements to identify organizations it supervises engaging in criminal actions with digital currency. According to NYDFS, the additional capabilities are a part of its attempts to stay on top of the market and react quickly to the virtual currency space.
NYDFS recent statement on virtual asset monitoring
On February 21, the NYDFS issued a brief statement outlining its new capability enhancements but left out any information regarding the “new insider trading and market manipulation risk monitoring tools.” However, the report promised: “The new enhancements will provide the Department with additional capabilities 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.”
“These capabilities will help us battle financial crime and fraud, hold regulated firms responsible, and further reinforce our national leadership in virtual currency supervision,” said NYDFS Superintendent Adrienne Harris.
Traces of NYDFS capacity enhancements attempts
Unspecified new technology capabilities are frequently announced, according to the NYDFS enforcement playbook. For example, after Russia invaded Ukraine, the agency declared “expedited procurement of more blockchain analytics technology” last year to implement sanctions against those companies.
The organization also frequently provides instructions for the organizations it oversees, advising banks on using cryptocurrencies in December and claiming to be the first regulator to publish stablecoin issuing standards in June.
After opening an investigation into the coin, the NYDFS recently played a crucial role in Paxos Trust, a blockchain infrastructure platform, deciding to stop producing the Binance USD (BUSD) stablecoin. NYDFS also forced Coinbase to pay $100 million earlier this year as compensation for allegedly holding a backlog of 100,000 suspicious transaction warnings. In addition, in August, NYDFS and Robinhood Crypto agreed on a $30 million fine for non-compliance with anti-money laundering regulations.
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