NEW YORK—Before they begin engaging in virtual currency-related activities, the New York State Department of Financial Services (NYSDFS) is encouraging financial institutions—including state-chartered CUs--to get its approval first.
The industry letter notes credit unions that are not New York state-chartered are exempted.
“A Covered Institution should seek the Department’s prior approval before commencing any new or significantly different virtual currency-related activity,” the NYDFS said. “Prior approval for a Covered Institution to engage in a virtual currency-related activity does not constitute general consent for that institution to engage in other types of virtual currency-related activity, nor does it authorize other Covered Institutions to undertake that same activity. Virtual currency-related activity performed by or through a third-party service provider engaged by a Covered Institution may constitute sufficient involvement by the Covered Institution to require the Department’s approval.
‘Consult in Advance’
“Therefore, where a Covered Institution intends to engage a third party to assist in performing a new or significantly different virtual currency-related activity, the institution should consult with the Department in advance,” the letter continues.
The letter adds that if a covered institution has any questions about whether a proposed activity constitutes a new virtual currency-related activity or about any proposed change to an existing virtual currency-related activity, the institution should seek clarification from the Department.
“A Covered Institution currently engaged in virtual currency-related activity should promptly notify its point of contact at the Department of the relevant activity if it has not already done so, to enable the Department to review and seek additional information or clarification, and impose any supervisory requirements, if needed,” the letter states.
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