The New York State Department of Financial Services (NYDFS) has made improvements to its capacity to spot fraudulent activity involving virtual currency among the entities it regulates.
According to the company, the additional capabilities are a part of its attempts to stay on top of the market and react quickly to the virtual currency space.
On February 21, the NYDFS issued a brief statement outlining its new capabilities but left out any information regarding the “new insider trading and market manipulation risk monitoring tools.”
However, the pledge was that the new improvements would help the department with enhanced ability to identify any front-running, market-rigging, and insider trading linked with applicants’ and Department-regulated companies’ exposure to or potential exposure from listed virtual currency wallet addresses.
New York steps in fighting fraud
NYDFS Superintendent Adrienne Harris stated that,
“These capabilities will help us battle financial crime and fraud, hold regulated firms responsible, and further reinforce our national leadership in virtual currency supervision.”
Unspecified new technology capabilities are frequently announced, according to the NYDFS enforcement playbook. After Russia invaded Ukraine, the agency declared “expedited procurement of more blockchain analytics technology” last year as part of its implementation of sanctions against those companies.
The New York regulator also frequently provides instructions for the entities it oversees, advising banks on using cryptocurrencies in December and claiming to be the first regulator to publish stablecoin issuing standards in June.
It forced Coinbase to pay it $100 million earlier this year as compensation for allegedly holding a backlog of 100,000 suspicious transaction warnings. It and Robinhood Crypto came to an agreement in August for a $30 million fine for violations of anti-money laundering compliance.