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Evolution of the NYDFS Virtual Currency Licensing Regime

July 23, 2020 | Compliance Financial Crime Consulting

In the Summer of 2015, the New York State Department of Financial Services (“DFS”) became the first state banking regulator to issue a stand-alone virtual currency regulatory framework (23 NYCRR Part 200).  Prior to the creation of this virtual currency license, also known as the “Bitlicense,” institutions followed different paths to seek approval from the DFS for their crypto-related activities involving New York or New York residents.  Some institutions, like Paxos Trust Company, LLC (f/k/a itBit Trust Company, LLC) and … Read More

Deutsche Bank Sanctioned in Connection with Jeffrey Epstein Banking Relationship

July 9, 2020 | Compliance Financial Crime Consulting

The New York Department of Financial Services (“NYDFS”) recently sanctioned Deutsche Bank (“DB”) $150 million for BSA/AML deficiencies.  According to the regulator’s factual findings, the compliance failures arose in connection with the bank’s private wealth relationship with Jeffrey Epstein, and correspondent banking relationships with Danske Bank Estonia (“Danske Estonia”) and FBME Bank (“FBME”), both located in Eastern Europe.

This latest enforcement action against DB follows several others issued against the bank by NYDFS since 2015, including for improper conduct arising … Read More

NYDFS to Industry: NY Means Business When it Comes to Having a License to do Business

April 24, 2020 | Compliance Financial Crime Consulting

The New York State Department of Financial Services (NYDFS) has taken several high-profile enforcement steps in recent months against entities alleged to have taken advantage of doing business in New York State without the necessary regulatory license.  Enforcement activity against the National Rifle Association (NRA), Athene Holding Ltd., as well as Trinity Healthshare and Aliera, serve as reminders that NYDFS takes very seriously the obligation to abide by New York statutory licensing requirements.

This is for good reason — businesses … Read More

NYDFS Issues Enforcement Action Against the Industrial Bank of Korea

April 21, 2020 | Compliance Financial Crime Consulting

The New York State Department of Financial Services yesterday issued an enforcement action against the Industrial Bank of Korea (“IBK”) for violations of New York’s anti-money laundering and recordkeeping obligations. It is the first of these type of BSA/AML enforcement actions issued by the Department in some time; this is not surprising, given that NYDFS, like other regulators, has been consumed with responding to the COVID-19 pandemic.

Significant elements of the Consent Order include:

  • a $35 million penalty to be
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NYDFS Issues Additional COVID-19 Guidance Regarding Cybersecurity

April 16, 2020 | Compliance Financial Crime Consulting

The New York State Department of Financial Services has been issuing a stream of orders and guidance for regulated institutions concerning the COVID-19 pandemic. This week it issued another one directed at cybersecurity.  DFS is widely known for its first-in-the-nation mandatory and comprehensive cybersecurity regulation (23 NYCRR Part 500), and this new guidance is intended to inform licensees that DFS has “identified several areas of heightened cybersecurity risk as a result of this [health] crisis.”


The DFS guidance
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A Robust Whistleblowing Program is an Essential Component of a Comprehensive Compliance Program

October 14, 2019 | Compliance

Whistleblowing is in the news.   Current events are a timely reminder of the importance of having in place sound and up-to-date policies, procedures and programs for whistleblowing.  A number of prudential regulators, such as federal and state bank regulators, and the Securities and Exchange Commission, all include review of a company’s whistleblowing program as standard in periodic examinations or inspections.

A robust whistleblowing program is an essential component of a comprehensive compliance program for financial institutions and other large corporations.  … Read More

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