New York Mandates Blockchain Analytics for Banks in Crypto Oversight Push

The New York State Department of Financial Services (NYDFS) has escalated its crypto regulatory framework, compelling all state-chartered banks to deploy blockchain analytics tools for compliance. Superintendent Adrienne Harris framed the move as a necessary evolution for traditional finance institutions dipping into digital assets.

Wednesday's directive builds on 2022's VIRTUAL currency business rules, now extended to conventional banks. The order requires wallet screening and transaction monitoring capabilities comparable to those used by licensed crypto firms. "Compliance functions must adapt with new tools to mitigate novel risks," Harris stated, signaling heightened scrutiny of banking sector crypto exposure.

The policy reflects regulators' growing reliance on forensic blockchain technology to track illicit flows. While the guidance doesn't specify vendors, it effectively institutionalizes chain-analysis software as banking infrastructure—a development likely to spur adoption of compliance-focused crypto services.