NYDFS Chief: Regulators Ready to Act Against Crypto Rule Violators

• NYDFS Superintendent Discusses Regulatory Actions Against Non-compliant Crypto Companies
• A Global and Bespoke Approach to Cryptocurrency Regulation
• Enforcement Actions Against Major Crypto Firms
• Binance Reaches Settlement with U.S. Regulators
• The Global Perspective on Cryptocurrency Regulation
• Calls for Global Standards for Cryptocurrency Regulation

NYDFS Superintendent Discusses Regulatory Actions Against Non-compliant Crypto Companies

Superintendent Adrienne Harris from the New York State Department of Financial Services (NYDFS) addressed the agency's readiness to implement enforcement actions against any cryptocurrency companies not adhering to its regulations. Her comments were delivered during a recent Financial Times conference.

A Global and Bespoke Approach to Cryptocurrency Regulation

Advisers, as well as several other regulators, are promoting a custom and worldwide strategy towards cryptocurrency regulation and control. This has led to some major enforcement action from NYDFS against several high-profile names in the cryptocurrency industry.

Enforcement Actions Against Major Crypto Firms

In January, Coinbase (COIN) had to pay a $50 million fine to settle charges brought by NYDFS. The company allegedly allowed users to create accounts without proper background checks. Similarly, in 2020, Robinhood (HOOD) received a $30 million fine for alleged violations of anti-money laundering and cybersecurity regulations.

Superintendent Harris has called this a tone reset regarding cryptocurrency regulations. The message is clear: if companies don't adhere to the rules, regulatory enforcement will follow.

Binance Reaches Settlement with U.S. Regulators

The Binance cryptocurrency exchange recently agreed to a record-setting deal with U.S. regulators to settle charges of serving U.S. customers without necessary approvals and processing transactions with customers in sanctioned areas.

Harris expects that this focus on the illicit financial component of cryptocurrencies will continue to increase due to cases like Binance, and others that have arisen globally. NYDFS remains committed to taking action when necessary.

The Global Perspective on Cryptocurrency Regulation

Regulators worldwide are figuring out the best methods to regulate the cryptocurrency sector. The European Union, for example, has implemented the Markets in Crypto Assets regulation. These rules govern the digital asset industry and apply to all 27 EU members. Some see this as a step towards legitimizing cryptocurrency.

Peter Kerstens, an adviser at the European Commission, clarified on the panel that crypto is not illegitimate but just a technology. He acknowledged the potential for misuse, asserting that efforts to regulate these activities are underway.

Calls for Global Standards for Cryptocurrency Regulation

Lisa Cameron, a UK Parliamentarian who was also a panel member, called for the implementation of global standards for cryptocurrency regulation. She emphasized the need for a baseline of standards which jurisdictions could build on, advocating for a coordinated, global approach.

International regulatory organizations, including the Financial Stability Board and the International Organization of Securities Commissions, have issued global standards for countries to implement.

Edited by Jonathan Stoker