HomeNewsCryptocurrencyNYDFS Urges Crypto Firms To Rely More On Blockchain Analytics Tools

NYDFS Urges Crypto Firms To Rely More On Blockchain Analytics Tools

Things are not getting easier for crypto firms operating in the state of New York. A senior State regulator wants all crypto firms to use blockchain analytics tools. That approach should help reduce financial risk and suspicious activities. 

Blockchain Analytics For Crypto Firms

It makes much sense for crypto and blockchain firms to use blockchain analytics tools on paper. Through these tools, they can monitor all transactions and ensure no unusual or suspicious activity regarding funds. However, NYDFS Superintendent Adrienne Harris wants to push the envelope on this front. In her opinion, all regulated crypto firms in the state should rely on these tools and bring more legitimacy to the cryptocurrency industry. 

Adrienne Harris adds:

“Blockchain analytics tools provide companies with an efficient, data-driven way to conduct customer due diligence, transaction monitoring, and sanctions screening, among other things, which are all critical elements of our virtual currency regulation. We expect regulated entities to utilize best practices to uphold the safety and soundness of the virtual currency market and to protect consumers.”

Although there is no official “rule” for companies to use blockchain analytics tools, Harris issued new guidance. Essentially, all crypto firms need to establish stronger control measures and document policies, processes, and procedures regarding integrating such tools. However, it will not change much for the handful of companies who obtained a BitLicense to operate in New York State, as most of them focus on accountability and transparency already. 

One crucial change on the horizon is how companies will need to obtain and maintain information regarding all [potential] customers. Companies must use that information to analyze and address any risk such users may represent. Additionally, risk profiles need to be drawn up for different types of users and instituting appropriate control measures – with blockchain analytics tools – to monitor and identify unusual activity. 

JP Buntinx
JP Buntinx
JP Buntinx is passionate about cryptocurrencies, fintech, blockchain, and finance. He currently resides in Belgium.
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