The New York Department of Financial Services (NYDFS) has published a new guidance for cryptocurrency businesses, requiring companies to segregate customer cryptocurrencies from the corporate assets.
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The regulator pointed out that businesses should "clearly and prominently" explain, how exactly they segregate customers' funds. The NYDFS expects that crypto companies "will not comingle customer virtual currency" with any of its own crypto.
Moreover, crypto companies should also "clearly disclose" to customers in the general terms services and activities. In addition, companies that store customers' crypto should also "make clear the parties' intentions to enter into a custodial relationship, rather than a debtor-creditor relationship."
The guidance comes after reports found out that Sam Bankman-Fried's hedge fund Alameda Research was using FTX customers' funds to operate its business. According to The Wall Street Journal, Alameda Research owes FTX around $10 billion after taking loans funded by FTX customers without their knowledge.
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