The New York State Department of Financial Services (NYDFS) has made measures that would make it easier for the businesses it regulates to report criminal actions involving virtual currency. It said that the new features are a part of its strategy to stay current with the market and fast react to a demand for virtual currency.
The NYDFS issued a succinct statement announcing its expanded capabilities on February 21. The "new insider trading and market manipulation risk monitoring technologies" weren't discussed at any length in the release. The new improvements, however, will provide the Department more skills to find potential insider trading, market manipulation, and front-running activities connected to applicants' and applicants' exposure to or potential exposure from stated virtual currency wallet addresses, the release added.
"These capabilities will help us battle financial crime and fraud, hold regulated firms responsible, and further reinforce our national leadership in virtual currency supervision," said Adrienne Harris, who is in charge of the NYDFS.
The NYDFS enforcement approach appears to include making ambiguous claims about new technical abilities. After Russia invaded Ukraine, the agency proposed "expedited procurement of more blockchain analytics technologies" in order to impose sanctions on those corporations.
Also, the agency offers frequent guidance to the companies it regulates. It instructed banks on how to operate with cryptocurrencies in December, and in June it claimed to be the first regulator to provide guidance on the issuance of stablecoins.
After starting an investigation into the stablecoin, the NYDFS assisted the Blockchain infrastructure platform Paxos Trust in deciding to discontinue the production of Binance USD (BUSD). Earlier this year, it received a $100 million settlement from Coinbase for allegedly allowing 100,000 suspicious transaction warnings to accumulate. It and Robinhood Crypto consented to a $30 million fine in August for violations of anti-money laundering compliance.
The NYDFS is reportedly investigating Gemini's Earn lending scheme, too.
The state of New York introduced BitLicense in 2015, which is renowned for its stringent regulations. Even the mayor of New York City, Eric Adams, has criticised this licencing system as being "stifling."