Top New York Regulator Updates Crypto Guidance After Departure Announcement

NYDFS updates crypto guidance ahead of Harris’ departure, focusing on custodianship and user protection in insolvency cases.

New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris has announced updates to state crypto guidance. These changes come ahead of her departure on October 18. The new guidance aims to better protect users in the event of a crypto company’s insolvency.

Updates to Crypto Custodian Guidelines

The NYDFS updated its guidance to address the growing use of sub-custodians in crypto asset management. The new rules clarify what qualifies as an acceptable sub-custodian.

Custodians are now required to store customer crypto in separate on-chain wallets or omnibus on-chain wallets with internal ledger accounts.

These changes ensure that crypto custodians cannot use users’ funds for their own purposes, such as securing credit.

The updated guidance seeks to prevent misuse of customer assets during insolvency proceedings. This move aims to provide more transparency and security for crypto users.

Harris Steps Down as NYDFS Superintendent

Harris announced she would step down from her role as NYDFS Superintendent, effective October 18. She served at the department for nearly four years, making significant contributions to crypto regulation.

Kaitlin Asrow, the current executive deputy superintendent, will take over as acting superintendent until a permanent replacement is named.

Harris’ departure marks a transition in leadership for the NYDFS, especially at a critical time for crypto regulation. Her leadership has shaped the department’s approach to crypto oversight. The updates to the guidance will remain in place under the new acting superintendent.

NYDFS’s Role in Crypto Oversight

The NYDFS has long been a key regulator for crypto companies operating in New York. The department introduced the BitLicense program in 2015 to regulate digital asset businesses.

Moreover, the program has helped establish clear rules for crypto businesses and has influenced how other states approach crypto regulation.

The NYDFS continues to monitor and regulate the crypto industry in New York. Its role is essential in setting the standards for businesses operating within the state. The latest guidance changes highlight the department’s ongoing commitment to ensuring consumer protection.

Changes in New York City Leadership

In addition to Harris’ departure, New York City Mayor Eric Adams recently announced that he would not seek re-election in 2025.

Adams, known for his support of the crypto industry, had previously received his first three paychecks in Bitcoin. His administration has been outspoken about adopting crypto-friendly policies for the city.

Adams’ decision to not run again could affect the city’s approach to crypto regulation. His departure may lead to new leadership with different views on digital assets. The city’s crypto policies could shift depending on the next mayor’s stance on the industry.

These leadership changes in both the state and city highlight the evolving nature of crypto regulation in New York. As new figures take charge, the future of crypto policy in the region will be an important issue to watch.

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