The regulator showed particular concern over the possibility that hackers might try exploiting the virus outbreak. NYDFS “underscored” the risk of under-the-radar hacks and implored firms to consider implementing more robust security measures that could detect “fraudulent trading or withdrawal behavior.”
New York’s Department of Financial Services (NYDFS) is requiring the state’s sanctioned cryptocurrency firms to provide detailed coronavirus preparedness plans, signaling the seriousness COVID-19 poses to businesses as well as public health.
“Virtual currency” businesses must produce contingency plans with painstaking and granular detail, according to a letter sent out Tuesday. Preparations must include employee protection strategies, increased cyber-risk mitigation, disaster communication plans and procedures to ensure the continued functioning of critical operations “at a minimum.” They must also lay out their point-by-point plans for the eventuality of a potentially snowballing outbreak.
The agency further highlighted the chance that remote workers could imperil custodied assets as they move funds from “cold” (offline) storage to “hot” (internet connected) wallets.
Firms are required to submit their plans in the next 30 days, but preferably “as soon as possible”, according to the letter. A NYDFS press officer did not immediately respond to questions over whether the request applies to all BitLicense holders.
The request offers a striking look at New York’s in-the-moment response to a crisis growing more layered by the hour. When NYDFS issued the memo on Tuesday, New York state was already days into a coronavirus-triggered state of emergency. But businesses across the state and its namesake city, where most of New York’s virtual currency firms are based, were still mulling what, if anything, to do in response to the outbreak.
By Thursday, that dynamic had seemed to change, however. Governor Andrew Cuomo declared a moratorium on mass gatherings and Mayor Bill de Blasio of New York City declared a citywide state of emergency, warning the public that coronavirus could “easily be a 6-month crisis” in near back-to-back press conferences.
The drastic shift in public opinion, government outlook and business realities across the week made the plans that only days earlier seem preventative appear far more vital to New York state’s daily life.
New York Watchdog Extends Window for Bittrex Users to Withdraw Funds
Crypto exchange Bittrex will once again extend its deadline for New York customers to withdraw funds from their accounts following approval from the New York Department of Financial Services (NYDFS).
Announced Friday by Bittrex, the extension is the second since the Seattle-based exchange was denied a regulatory license to operate in the state in early April, colloquially called the BitLicense.
Originally, Bittrex customers were given until June 8 to withdraw deposits on the exchange which was bumped to Oct. 24 with permission from the DFS
The state regulator had withheld licensing from Bittrex due to poor customer and transaction monitoring along with a lack of qualified staff, the executive deputy superintendent of banking for the NYDFS, Shirin Emami, said in an April CoinDesk opinion article.
New York’s BitLicense – largely considered the most rigorous state regulatory framework in the U.S. – has recently come under revision from the regulator itself.
Speaking at DC Fintech Week Oct 22, NYDFS Superintendent Linda Lacewell said the body is reviewing its standards in light of the industry’s evolution.
“This is a good time to take a look, a responsible look and see how our regime is fitting the current market and … what if any adjustments should we think about making to continue to adapt to … a changing industry”, she said at the time.
