New York regulator urges banks to harness blockchain analytics for crypto risks

New York’s apical fiscal regulator advised banks to grow their usage of blockchain analytics erstwhile handling virtual currency.

The regulator noted successful a Sept. 17 industry letter sent to state-chartered banks and overseas branches operating successful New York that the tools tin assistance institutions better negociate risks related to wealth laundering, sanctions violations, and different illicit activity.

Superintendent Adrienne Harris of the Department of Financial Services said the technology has proven effective for licensed virtual currency companies and should beryllium considered by banks that either prosecute straight successful integer assets oregon brushwood crypto enactment done their customers.

The section archetypal issued guidance connected blockchain analytics successful April 2022, aimed astatine firms holding authorities virtual currency licenses. Since then, Harris said, banks person shown “increasing involvement successful and vulnerability to virtual currency” that warrants akin safeguards.

The regulator recommended that banks usage blockchain analytics to surface lawsuit wallets, verify the root of crypto-linked funds, show enactment crossed the broader integer plus ecosystem, and measure counterparties specified arsenic virtual plus work providers.

Banks are besides encouraged to comparison expected versus existent activity, make hazard assessments from network-wide intelligence, and measurement the risks of introducing caller virtual currency products.

The section stressed that the database of applications was not exhaustive, noting that controls should beryllium tailored to each bank’s hazard appetite and operations. Harris urged institutions to update compliance frameworks regularly arsenic markets, customers, and technologies evolve.

According to the notice:

“Emerging technologies present caller and evolving threats that necessitate caller tools.”

It added that blockchain analytics tin assistance banks safeguard the fiscal strategy against threats, including violent financing and sanctions evasion.

The guidance does not change existing authorities oregon national laws but highlights however regulators are pushing accepted banks to follow the aforesaid risk-monitoring standards that person agelong applied to licensed crypto firms.

The station New York regulator urges banks to harness blockchain analytics for crypto risks appeared archetypal connected CryptoSlate.