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ARTICLE · 04 MAY 2022

NYDFS Provides Guidance On The Use Of Blockchain Analytics To Maintain Compliance

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On April 28, the New York Department of Financial Services (NYDFS) provided a "Virtual Currency Guidance" update. The guidance is directed towards all virtual currency businesses licensed under 23 NYCRR Part 200 ...

United StatesTechnology
Sarah Aberg
Sarah Aberg
Gabriel Khoury
Gabriel Khoury
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On April 28, the New York Department of Financial Services (NYDFS) provided a "Virtual Currency Guidance" update. The guidance is directed towards all virtual currency businesses licensed under 23 NYCRR Part 200 (the New York BitLicense) or limited purpose trust companies chartered under the New York Banking Law (collectively, "VC Entities")." The guidance mandates VC Entities to employ blockchain analytics to design and implement effective BSA/AML policies, processes, and procedures, including, for example, those relating to customer due diligence, transaction monitoring, and sanctions screening.

The Guidance addressed five key compliance concepts and issues:

Compliance in a virtual currency context should leverage the unique features of blockchain technology. Virtual currencies can be transferred from one individual or entity to another pseudonymously and without relying on a regulated third party. But, at the same time, each and every transaction is

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