New York State-registered banks will need to seek regulatory permission 90 days before they get involved in cryptoassets, even if it's via a third party, new guidance from the state banking regulator said.
Banks will have to submit business plans and operating models to the Department of Financial Services, including details of which customers they're targeting, the guidance published Thursday said.
“Today’s guidance is critical to ensuring that consumers’ hard-earned money is protected, that New York regulated banking organizations remain resilient and competitive, and that the expectations are clear for those that wish to submit proposals for virtual currency-related activity," Superintendent Adrienne Harris said in a statement.
"The Department takes seriously the potential risks that novel activities, including in particular virtual currency-related activities, may pose to Covered Institutions, to consumers, and to the market in general," the guidance added.
The regulator wants banks to check whether there are risks of ripping off consumers, cyberattacks, or undermining the bank's capital base before approving plans, the guidance said.
It applies to a wide range of crypto services including transmission, custody and buying and selling, even if operated via a third party under contract, and those already involved in crypto need to notify regulators "immediately" if they didn't already, the Department said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.