NYDFS Urges Crypto Market Participants to Plan Ahead Against Coronavirus
The New York State Department of Financial Services (NYDFS) has issued fresh guidance to cryptocurrency exchanges and other virtual currency market participants, concerning the latest coronavirus COVID-19 pandemic. The DFS has mandated all bitcoin (BTC)linked businesses in the state to submit a response to it, detailing their preparedness to manage the risks of service disruption that may arise, according to a press release dated March 10, 2020.
DFS Issue Coronavirus Guidance to Crypto Businesses
As the coronavirus pandemic continues to spread across the world, with the disease already claiming 41 lives in the United States alone and 5,111 reported deaths globally, the New York state financial regulator has now issued fresh guidance to virtual currency market participants concerning their preparedness during this dark moment.
As stated in its press release, the DFS has asked all virtual currency businesses under its purview to send in a detailed report on their contingency plans put in place to optimally handle the financial and operational risks posed by the pandemic.
The DFS said:
“COVID-19 has already had adverse economic effects domestically and globally. It is critical that each regulated entity formulate plans to address how it will manage the effects of the outbreak and assess disruptions, as well as, other risks to its services and operations.”
Crypto Businesses Must Respond within 30 Days
Specifically, the regulator has made it clear that all crypto-related businesses in the state must send in their responses within the next 30 days to the designated email address and they must explain in detail, the measures they have put in place to ensure they remain operational during this period.
Notably, the DFS has stated categorically that crypto businesses are required to explain in detail the preventive measures they have designed to mitigate the risk of service disruption due to COVID-19, present a documented strategy addressing the impact of the pandemic in phases and a detailed assessment of “potential increased risk of cyberattacks and fraud” as a result of the outbreak.
Also, market participants are required to describe their employee protection strategies put in place to ensure their staff remain safe while carrying out their regular activities during the outbreak.
What’s more, virtual currency businesses are required to send in their assessment report concerning the valuation of their investments and assets that maybe, or have been, impacted by COVID-19, assessment of the impact of the disease on their earnings, profits, capital, and liquidity, among other requirements.
It’s worth noting that financial institutions in the U.S. including the New York Stock Exchange are already putting measures in place to guard their clients and employees against coronavirus.
As reported by BTCManager on March 12, the Chicago Mercantile Exchange (CME) announced that it will shut down its Chicago trading floor after the close of business on Friday, March 13, 2020, due to the coronavirus epidemic.