NY Regulator Sends Letter to Coinbase, Ripple, Square Requesting Coronavirus Preparedness Plan

Coinbase, Ripple, Circle, Robinhood, Gemini, Genesis Global Trading, BitPay and Square are among 18 registered crypto-related businesses that received a request from the New York State Department of Financial Services (NYDFS) to submit their coronavirus preparedness plans.

In July of 2019, the regulator opened a new department focused on licensing and regulating crypto-related businesses in the state of New York, overseeing crypto services such as buying, selling, storing, sending and receiving digital assets on behalf of New York residents.

According to the letter, issued on Tuesday, the DFS is asking crypto firms under its jurisdiction to provide assurance relating to operational and financial risks arising from the outbreak.

“It is critical that each regulated entity establish plans to address how it will manage the effects of the outbreak and assess disruptions and other risks to its services and operations.”

Firms must submit a response within 30 days of the notice, outlining how they plan to manage the risk of disruption to their services and operations.

Each company is expected to submit a detailed strategy describing how it will respond to the impact of the outbreak in stages, so that efforts can be “appropriately scaled, consistent with the effects of a particular stage of the outbreak.”

Firms are also asked to map out an assessment of the potential increased risk of cyber-attacks and fraud due to an outbreak.

“DFS would underscore, in particular, the risk to Virtual Currency businesses of increased instances of hacking, cybersecurity threats, and similar events, as bad actors attempt to take advantage of a COVID-19 outbreak, and the possible resulting need for heightened security measures, such as enhanced triggers for fraudulent trading or withdrawal behavior.”

The letter gives some insight into how state officials plan to manage the ongoing economic disruption in New York, where the coronavirus has infected a cluster of people in New Rochelle, making it the second-largest cluster of Covid-19 cases in the United States after Seattle, Washington.

Officials in the state are currently rolling out the state’s first drive-through testing center.

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