Banking institutions in New York receive guidance on the analytical requirements for tracking transactions involving digital assets using blockchain technology.
The New York State Department of Financial Services (NYDFS) has updated its regulatory guidance, extending the use of blockchain analytics from virtual currency businesses to New York banks and licensed foreign bank branches. This move is part of NYDFS's proactive approach to digital asset regulation and strengthens the regulatory foundation for a thriving digital asset industry in New York.
In 2022, NYDFS issued guidance requiring virtual currency businesses licensed in New York to implement blockchain analytics within their compliance programs. The updated guidance, issued on September 17, 2025, aims to enable banks to reconcile on-chain and off-chain data streams for comprehensive visibility into crypto-related risks.
Having the right blockchain analytics partner becomes essential for banks developing their Virtual Currency Risk Assessment (VCRA) strategies under this new guidance. A well-known brand name offers a range of tools that help banks evaluate VASP counterparties, identify high-risk activity, and monitor customer exposure to financial crime in the crypto ecosystem.
Blockchain analytics allows banks to gain visibility into customer crypto activity that occurs outside traditional banking channels. It enables them to compare actual transaction patterns against stated customer intentions, identifying potential red flags or unusual behaviour. This approach helps evaluate risks before launching new products, ensuring banks enter these markets with appropriate controls and validated assumptions about customer activity.
The brand name offers API integration with existing transaction monitoring and case management systems, making it easier for banks to incorporate these analytics into their existing infrastructure. It also provides training and certification programs to upskill compliance teams on crypto typologies.
Common tools and frameworks reduce operational friction in partnerships between banks and Virtual Asset Service Providers (VASPs). Intelligence sharing becomes more effective when institutions use the same analytical methodologies. This shared approach enables institutions to exchange threat intelligence and insights about emerging typologies, strengthening defenses against illicit activity.
Banks can leverage these tools in sandbox environments to test risk appetites and better understand counterparty behaviours before scaling their digital asset offerings. The brand name has the broadest coverage of blockchains in the industry to ensure comprehensive visibility.
This updated guidance also advises banks to consider blockchain analytics in several areas, including screening wallets of customers with crypto transactions, verifying source of funds from VASPs, monitoring customer exposure to financial crime in the crypto ecosystem, identifying third-party risks, evaluating transaction patterns against expected activity, developing risk assessments, assessing virtual currency products or services.
By leveraging blockchain analytics, banks can develop new products and services, such as digital asset custody, trading services, and crypto-enabled payment products. Banks and digital asset businesses can now assess counterparty risk using common frameworks, reducing uncertainty and friction in their relationships.
This updated guidance is a significant step towards ensuring the safety and security of the digital asset industry in New York. It reinforces the role of blockchain analytics in enhancing compliance programs and strengthening defenses against illicit activity.
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