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ARTICLE · 24 MAY 2023

New York Settles With Crypto Company, Proposes Crypto Legislation

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On May 1, NYDFS settled with a cryptocurrency trading platform over the company's cybersecurity deficiencies, resulting in a consent order and $1.2 million fine for the crypto company.

United StatesTechnology
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Kathryn Smith
Kathryn Smith
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On May 1, NYDFS settled with a cryptocurrency trading platform over the company's cybersecurity deficiencies, resulting in a consent order and $1.2 million fine for the crypto company. NYDFS alleged "multiple deficiencies in the Company's cybersecurity program" discovered during NYDFS examinations in 2018 and 2020. The examinations prompted an investigation, ultimately leading to the consent order and the fine.

Businesses are subject to NYDFS legal requirements through their Cybersecurity and Virtual Currency Regulations (23 NYCRR Part 500). Under these regulations, businesses must establish and maintain a sufficient cybersecurity program, conduct risk assessments, updates, and remediations to their cybersecurity programs to ensure that they are up-to-date, obtain board approval for policies, and maintain a written security policy.

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