Key Takeaways
- Expedited consideration requires three years of regulated operations.
- Regulators aim for decisions within six months, subject to conditions.
- Joint examinations and investigative exchanges expand cooperation.
Crypto Firms Get a Path to Faster Interstate Reviews
Crypto businesses expanding between New York and Wyoming could qualify for expedited regulatory reviews under an agreement announced Oct. 1. New York State Department of Financial Services (DFS) Acting Superintendent Kaitlin Asrow and Wyoming Division of Banking Commissioner Jeremiah Bishop agreed to coordinate crypto oversight through a memorandum of understanding (MOU).
Asrow described the arrangement as a way to strengthen oversight while supporting responsible market development across the two jurisdictions. She said:
“This MOU will add to the resources and information available to each regulator, helping to facilitate responsible innovation in the market while protecting consumers across our respective jurisdictions.”
Under the signed MOU, expedited review requires at least three years of operations under the existing regulator and no current enforcement action. The proposed business models must be sufficiently similar, and the existing regulator must supply all requested historical examination information.
For qualifying applications, the reviewing authority will endeavor to reach a final decision within six months of the application date or receipt of historical examination information, whichever is later. Each jurisdiction retains responsibility for granting approval. Companies seeking authorization in both simultaneously will receive coordinated assessments, including shared analyses and specialized evaluations.
Joint Examinations Extend Cooperation Beyond Licensing
Once a company or affiliated businesses operate under both regulators, then the agreement provides for coordinated examination schedules and joint examinations where practicable. These inspections assess compliance and can produce a joint examination report or separate, coordinated findings. Participation does not require more frequent inspections than each agency’s laws prescribe.
The arrangement covers oversight of digital asset activities involving businesses operating, or seeking permission to operate, in either jurisdiction. Such services can include exchanging cryptocurrency, trading digital assets for other assets, or traditional money. Officials will also exchange market trend data and may collaborate on regulatory and supervisory approaches.
Enforcement cooperation includes notifying the other regulator when a jointly supervised entity may face action, exchanging investigative information, and providing investigation updates. Authorities can proceed jointly, in coordination, or separately. Confidential material remains subject to restricted access and disclosure safeguards, with provisions for legally compelled production. Bishop described the partnership as a way to improve supervisory effectiveness.
New York Crypto Licensing Meets Wyoming’s Digital Asset Banking
New York and Wyoming oversee a range of licensed or chartered businesses, including payment providers, cryptocurrency firms, and banks. The two systems cover activities ranging from cryptocurrency services to banking functions, including safeguarding customer holdings. Wyoming’s special purpose depository institutions are fully reserved banks that can accept deposits and provide custody, asset servicing, and related functions. Fully reserved means maintaining liquid assets equal to or exceeding customer cash deposits. Custody involves holding assets on customers’ behalf.
That banking structure has also supported access to federal payment infrastructure through an authorization separate from the interstate pact. Kraken Financial received a limited-purpose master account on March 4 for an initial one-year term, subject to restrictions. The account allows the Wyoming-chartered bank to connect directly to core U.S. payment rails, including Fedwire.
On the licensing side, New York has approved established payment providers alongside firms specializing in crypto financial services. Mastercard Transaction Services, part of payments company Mastercard, received a Bitlicense on May 27. DFS established that virtual currency licensing framework in 2015, placing approved businesses under supervisory standards covering consumer protection and financial soundness.
Institutional investors have gained another regulated channel for trading and custody through a separate set of approvals. Digital asset financial services company Galaxy secured New York licenses on May 18 for services to institutional investors. Its designated entity, Galaxyone Prime NY, serves hedge funds, registered investment advisers, and family offices.
