The post New York regulator urges banks to harness blockchain analytics for crypto risks appeared on BitcoinEthereumNews.com. New York’s top financial regulator advised banks to expand their use of blockchain analytics when handling virtual currency. The regulator noted in a Sept. 17 industry letter sent to state-chartered banks and foreign branches operating in New York that the tools can help institutions better manage risks related to money laundering, sanctions violations, and other illicit activity. Superintendent Adrienne Harris of the Department of Financial Services said the technology has proven effective for licensed virtual currency companies and should be considered by banks that either engage directly in digital assets or encounter crypto activity through their customers. The department first issued guidance on blockchain analytics in April 2022, aimed at firms holding state virtual currency licenses. Since then, Harris said, banks have shown “increasing interest in and exposure to virtual currency” that warrants similar safeguards. The regulator recommended that banks use blockchain analytics to screen customer wallets, verify the origin of crypto-linked funds, monitor activity across the broader digital asset ecosystem, and evaluate counterparties such as virtual asset service providers. Banks are also encouraged to compare expected versus actual activity, develop risk assessments from network-wide intelligence, and weigh the risks of introducing new virtual currency products. The department stressed that the list of applications was not exhaustive, noting that controls should be tailored to each bank’s risk appetite and operations. Harris urged institutions to update compliance frameworks regularly as markets, customers, and technologies evolve. According to the notice: “Emerging technologies introduce new and evolving threats that require new tools.” It added that blockchain analytics can help banks safeguard the financial system against threats, including terrorist financing and sanctions evasion. The guidance does not alter existing state or federal laws but highlights how regulators are pushing traditional banks to adopt the same risk-monitoring standards that have long applied to licensed crypto… The post New York regulator urges banks to harness blockchain analytics for crypto risks appeared on BitcoinEthereumNews.com. New York’s top financial regulator advised banks to expand their use of blockchain analytics when handling virtual currency. The regulator noted in a Sept. 17 industry letter sent to state-chartered banks and foreign branches operating in New York that the tools can help institutions better manage risks related to money laundering, sanctions violations, and other illicit activity. Superintendent Adrienne Harris of the Department of Financial Services said the technology has proven effective for licensed virtual currency companies and should be considered by banks that either engage directly in digital assets or encounter crypto activity through their customers. The department first issued guidance on blockchain analytics in April 2022, aimed at firms holding state virtual currency licenses. Since then, Harris said, banks have shown “increasing interest in and exposure to virtual currency” that warrants similar safeguards. The regulator recommended that banks use blockchain analytics to screen customer wallets, verify the origin of crypto-linked funds, monitor activity across the broader digital asset ecosystem, and evaluate counterparties such as virtual asset service providers. Banks are also encouraged to compare expected versus actual activity, develop risk assessments from network-wide intelligence, and weigh the risks of introducing new virtual currency products. The department stressed that the list of applications was not exhaustive, noting that controls should be tailored to each bank’s risk appetite and operations. Harris urged institutions to update compliance frameworks regularly as markets, customers, and technologies evolve. According to the notice: “Emerging technologies introduce new and evolving threats that require new tools.” It added that blockchain analytics can help banks safeguard the financial system against threats, including terrorist financing and sanctions evasion. The guidance does not alter existing state or federal laws but highlights how regulators are pushing traditional banks to adopt the same risk-monitoring standards that have long applied to licensed crypto…