Attending a Financial Times event on Tuesday, Superintendent Adrienne Harris stated that the New York State Department of Financial Services (NYDFS) is not hesitant to take enforcement action against cryptocurrency companies that violate its regulations. Several of the most well-known figures in cryptocurrency have faced action from the authorities.Because it permitted users to create accounts without completing adequate background checks, the Coinbase (COIN) exchange was hit with a $50 million punishment by the NYDFS in January.Due to alleged violations of cybersecurity and anti-money laundering laws, trading site Robinhood (HOOD) was fined $30 million last year.
“So we’ve really spent a lot of time doing what I call when I first came into office, a tone reset, to say you are regulated, here are the expectations, here are the rules, and when you don’t follow them, we will bring enforcement actions,” said Harris.
Recently, the cryptocurrency exchange Binance and US officials came to a historic agreement to resolve accusations that Binance served US customers without the necessary authorization and permitted people to conduct business with clients in prohibited areas.
“We’ve been talking about the illicit finance component of cryptocurrencies. I think that’s going to continue and attention on that is going to be heightened as a result of Binance and some of the other cases that have been brought by DOJ and other authorities around the world,” Harris said, referring to the U.S. Department of Justice.
Regulators from all around the world have been figuring out how best to keep an eye on the cryptocurrency industry. The European Union has legislated the Markets in Crypto Assets regulation, which is a comprehensive set of guidelines that apply to all 27 of its members and which some fear legitimizes the industry.
“Well, there isn’t actually anything illegitimate about crypto. It is just a technology. It is a way to keep records. Rather than in a centralized entity, they have a shared ledger, so there is nothing illegitimate about it,” Peter Kerstens, an adviser at the European Commission, said during the same panel. “You can do an awful lot of illegitimate things with that technology, and we’ll try to moderate and regulate for that.”
U.K. Parliamentarian Lisa Cameron, who sat on the same panel, asked for global standards for crypto to be put in place.
“I think there has to be that sort of level of interoperability, as they say, and this kind of baseline of standards and then other jurisdictions will place other sort of aspects on top of that, but I think that’s something that we all need to really work towards,” Cameron said.
Nations are required to adhere to global norms that have been released by international standard-setters such as the Financial Stability Board and the International Organization of Securities Commissions.