NYDFS encourages crypto firms to use blockchain analytics services

The New York State Department of Financial Services (NYDFS) on Thursday encouraged crypto firms working in the state to adopt blockchain analytics tools and services. 

The guidance establishes "the use of blockchain analytics tools as a best practice to prevent and manage financial risks and suspicious activities," the agency said. The NYDFS is the chief state regulator in New York for crypto firms. 

Superintendent Adrienne Harris said in a statement:

“Blockchain analytics tools provide companies with an efficient, data-driven way to conduct customer due diligence, transaction monitoring, and sanctions screening, among other things, which are all critical elements of our virtual currency regulation. We expect regulated entities to utilize best practices to uphold the safety and soundness of the virtual currency market and to protect consumers.” 

The guidance follows comments in early March from state leaders, including Governor Kathy Hochul, on the use of such tools in the context of potential Russian sanctions evasion.