- The New York State Department of Financial Services (NYDFS) extended blockchain analytics guidance to include banks and licensed foreign bank branches along with virtual currency businesses.
- The updated guidance, issued on September 17, 2025, encourages banks to adopt blockchain analytics tools for risk management and compliance in digital asset-related activities.
- Key uses of blockchain analytics include wallet screening, verifying sources of funds, monitoring crypto-related financial crime risk, and assessing virtual asset service providers (VASPs).
- The guidance aims to create consistent compliance standards and improve transparency across traditional banks and digital asset businesses.
- Elliptic provides blockchain analytics solutions supporting various compliance needs under the updated NYDFS framework.
The New York State Department of Financial Services (NYDFS) announced an update on September 17, 2025, to its regulatory guidance. This update extends blockchain analytics requirements to New York banks and licensed foreign bank branches, aligning them with standards previously set for virtual currency businesses.
The 2025 guidance builds on earlier rules introduced in April 2022, which required virtual currency businesses licensed in New York to integrate blockchain analytics for customer due diligence, transaction monitoring, and sanctions screening. It emphasizes that banks engaging in virtual currency-related activities (VCRA) should leverage these tools to manage compliance and risk effectively.
NYDFS highlights several applications for banks including screening customer wallets, verifying funds from virtual asset service providers (VASPs), identifying third-party risks, and evaluating transaction patterns. The guidance provides banks with a framework to closely monitor crypto exposure and assess counterparty risks beyond traditional methods.
By adopting a unified approach across banks and crypto businesses, this guidance aims to reduce regulatory friction and enhance the ability to detect illicit activity exploiting gaps between conventional finance and blockchain transactions. Banks can also use blockchain analytics to better understand transaction behaviors and customize their risk appetite accordingly.
The updated industry standards allow institutions to share threat intelligence and maintain consistent compliance controls, supporting safer interactions in digital asset markets. The guidance also supports banks in developing new crypto products and services with built-in regulatory safeguards.
Elliptic, a provider of blockchain analytics, offers tools and training to assist banks and virtual currency businesses in meeting these NYDFS requirements. Their solutions cover risk assessment, wallet screening, transaction monitoring, and other compliance needs aligned with the updated guidelines.
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