DFS Superintendent Adrienne A Harris Extends Blockchain Analytics Guidance to New York State Banking Organizations Department of Financial Services

pppNew York State Department of Financial Services Superintendent Adrienne A Harris today issued new guidance on the use of blockchain analytics tools for banking institutions contemplating or already conducting virtual currencyrelated activities As banking institutions experience increasing interest in and exposure to virtual currency activities blockchain analytics tools have the ability to enhance compliance programs and prevent illegal activities Todays announcement builds upon previously released industry guidance to New York Stateregulated virtual currency entities ppAs traditional banking institutions expand into virtual currency activities their compliance functions must adapt onboarding new tools and technologies to mitigate new and different risks said Superintendent Harris As a leader in the regulation of virtual currency DFS will continue to set clear and transparent expectations for institutions to protect consumers and safeguard market integrity while also ensuring New Yorkregulated banking organizations can remain resilient and competitive  ppTodays guidance seeks to make clear compliance expectations and encourage any entity in New York State seeking to commence or currently engaged in virtual currencyrelated activity to leverage new technologydriven control measures  ppGiven an increase in virtual currency adoption New York Stateregulated banking organizations are expected to consider incorporating blockchain analytics as an additional riskmanagement tool  Applicable use cases may include   ppAssessing risk exposure through customer wallet screening and funds verification involving virtual asset service providers VASPs ppconducting holistic monitoring for illicit activity exposure and risk management of third parties ppaugmenting due diligence controls to evaluate expected versus actual activity such as dollar thresholds of customers engaging in virtual currency activity and ppweighing the risks associated with a virtual currency product or service to be offered ppA copy of the guidance can be found on the Departments website pp p