Over recent months, numerous state regulators, including in Massachusetts, Texas, and New Jersey, have been exercising greater oversight of cryptocurrency businesses.[1] On April 17, 2018, the office of the New York Attorney General Eric Schneiderman (“NYAG”) launched the Virtual Markets Integrity Initiative, which will seek information from various platforms that trade cryptocurrencies to better protect consumers. The initiative responds to concerns that cryptocurrency trading platforms may not provide consumers with the same information available from traditional exchanges. As part of the initiative, the NYAG’s Investor Protection Bureau sent thirteen major cryptocurrency trading platforms questionnaires relating to internal policies, controls, and best practices. The Bureau intends to consolidate and disseminate to consumers the information it receives.
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Financial Institutions
World Economic Forum Publishes Recommendations for Managing Cyber-Risk
On March 6, 2018, the World Economic Forum (WEF) published a white paper report analyzing challenges that financial services and fintech firms face in protecting customer information against the increasing risk of cyber-attacks and setting out proposals to better manage this cyber-risk.[1] As described below, the report recommends industry-wide efforts to adopt standardized cyber-risk metrics and to develop mechanisms for assessing cybersecurity. In conjunction with the publication of these recommendations, Citigroup Inc., Kabbage, Inc., Zurich Insurance Group AG and the Depository Trust & Clearing Corporation have formed a consortium to address cybersecurity risks in the fintech industry.[2]
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New York Cybersecurity Regulations for Financial Institutions Enter Into Effect
On March 1, 2017, the New York Department of Financial Services’ Cybersecurity Regulations entered into effect.
The Regulations impose on financial institutions minimum cybersecurity standards that exceed existing federal standards and introduce new requirements, including obligations to critically evaluate cybersecurity practices, maintain detailed documentation demonstrating compliance and report cyber events to the New York Department
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