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NYDFS advises crypto firms not to commingle user and corporate funds in the event of insolvency

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The New York Department of Financial Services, or NYDFS, has released guidelines on how licensed crypto firms should handle customer assets should they face “insolvency or similar proceeding”.In a Jan.

23 announcement, NYDFS superintendent Adrienne Harris said crypto firms and exchanges operating under a BitLicense — required in New York state — should segregate corporate funds from users’ virtual currency holdings both on-chain and in the “internal ledger accounts” of the company’s custodian.

According to the regulator, crypto firms are expected to hold users’ assets “only for the limited purpose of carrying out custody and safekeeping services”:In addition to these guidelines, NYDFS added that all licensed firms custodying assets should “maintain appropriate books and records” as well as disclose information related to its products and services in terms and conditions available to customers.

Harris said the guidance was aimed at the “safekeeping of customer assets”.#ICYMI: Superintendent Adrienne A. Harris released Regulatory Guidance to better protect customers in the event of an insolvency or similar proceeding.

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