The New York State Department of Financial Services (NYDFS) released regulatory guidance on Monday, ordering all crypto companies to separate funds belonging to the customers and their own. The regulatory superintendent, Adrienne Harris, highlighted that the rules focus on protecting customer funds in case of an insolvency or similar proceeding.
“DFS’s virtual currency regulation has protected New Yorkers since 2015,” Harris said. “Today’s guidance reminds DFS-regulated virtual currency companies of our expectations regarding the safekeeping of customer assets.”
The official announcement further highlighted four areas the new guidelines are addressing. These include the segregation and separate accounting of customer assets, clarification of custody and safekeeping services, sub-custody arrangements with third parties, and proper disclosure of general terms and conditions to the customers.
NYDFS is one of the crypto regulators with clear and stringent rules, overseeing the activities of the crypto companies within the state of New York. The new guidelines against the comingling of funds will apply to the companies that the regulator has licensed or chartered to custody, or temporarily hold, store, or maintain virtual currency assets on behalf of their customers.
Last month, the regulator also mandated the banking firms in the state to seek advance permission before they or…