Companies should separate customers' crypto assets from their own: Nydfs
Companies should separate customers' crypto assets from their own: Nydfs
The New York State Department of Financial Services (NYDFS) asked companies to separate the cryptocurrency stocks of customers from their own assets.
The Watchdog argued that the mixing of funds could cause a significant financial loss for investors.
The NYDFS recommendation
New York financial guards Problematic Instructions for state-regulated companies that should better protect their customers in the event of a possible bankruptcy. It outlined the increasing interest in cryptocurrencies in recent years and insisted that companies should retain increased control over the stocks of their customers. The agency also believes that the market must work under an appropriate regulatory framework:
"As the administrator of the assets of other games, virtual currency units (VCE), which act as a custody, an important role in the financial system, and therefore a comprehensive and safe framework of regulatory framework is of crucial importance and trust."
The NYDFS asked organizations to keep the crypto ownership of consumers separated from other assets. "It is expected that a VCE attitude is not mixed with the customer's virtual currency with the VCE vision's own virtual currency or with another virtual currency of non-customers," added the department. You should also release records and lead a "clear internal test path" to identify people about transactions that affect their property. The supervisory authority said that custody should not use the crypto-assets of the users to handle separate financial services, such as: B. the guarantee of an obligation or the granting of loans. Then they have to "clearly disclose" the general terms and conditions under which they store their depot. "In addition, the department expects a VCE depot bank to make its standard openings and customer agreements for customers on their website in accordance with the laws and regulations of New York," concluded the guideline. Adrienne Harris-the superintendent of NYDFS-said that the guidelines mentioned above could have a positive impact on the cryptocurrency industry and prevent future breakdowns. However, she believes that the supervisory authority should have acted earlier The decline of ftx . The exchange Submitted after bankruptcy after it did not meet customer withdrawal applications. One of the allegations against his former CEO-Sam Bankman-Fried (SBF)-is that his company mixed user funds with Alameda Research, which ultimately damaged numerous investors. The 30-year-old American has not guilty Such measures should have existed before FTX's meltdown
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