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New York's Financial Regulator Takes Aim at Firms Co-Mingling Crypto Funds (reuters.com) 17

New York's chief financial regulator is set to release new guidance on Monday dictating that companies separate customers' crypto assets from their own, after alleged co-mingling of funds at collapsed crypto exchange FTX and its affiliated trading firm Alameda Research led to hefty losses for clients. From a report: The New York State Department of Financial Services (NYDFS), which leads one of the few state agencies with a regulatory system in place for cryptocurrency companies, will also stipulate that state-regulated companies disclose to customers how they account for clients' digital currency. The guidance is the latest in a series of crypto-related directives NYDFS has issued in the past year, which saw a market collapse that wiped about $1.3 trillion off the value of crypto tokens in 2022. The meltdown triggered the bankruptcies of crypto firms such as FTX, Celsius Network and most recently, Genesis Global Capital, whose lending unit filed for U.S. bankruptcy protection on Thursday. It comes as federal regulators such as the U.S. Commodity Futures Trading Commission (CFTC) are warning about the lack of consumer protections in the crypto sector. Federal agencies like the CFTC say much of what they can do is limited without congressional legislation that would give them additional authority.
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New York's Financial Regulator Takes Aim at Firms Co-Mingling Crypto Funds

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  • somehow we need something else? nah, my blather coin is enough
  • ...best of all Tulips are solar powered.
  • by Anonymous Coward

    DeFi is not decentralized Finance - it's Deregulated Finance.

    Regulations tend to come into place when corporations are overly greedy and/or stupid in a way that causes the masses to get pissed enough to tell their elected officials to "DO SOMETHING ABOUT THIS OR WE'RE VOTING SOMEONE IN WHO WILL!"

    So, if you want to be both greedy and avoid regulation - you need to pull the reigns in enough to keep your suckers... er customers from getting overly pissed. Something that way too many greedy a-holes have done o

  • Didn't FTX claim to keep customer assets separate?

    Crypto is a mania, and buying it with the idea that you'll make a profit is a fool's investment, but that has little to do with the fraud that FTX perpetrated.

    Fraud is already illegal, don't see how another law is going to help.

    • Because the world is full of jackasses who's mindset is that if they aren't explicitly told not to, then they can.

      "But We're innovative and disrruptive!!!!!"

    • Comment removed based on user account deletion
      • I don't know why they should be compared to banks?. It seems to me like they're running an exchange and I don't think the Nasdaq and their like is allowed to do their own trading at all (they certainly don't and won't but apparently crypto is different).

"Bureaucracy is the enemy of innovation." -- Mark Shepherd, former President and CEO of Texas Instruments

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