On March 10, the New York State Department of Financial Services issued guidance directing digital currency firms to provide the government with their coronavirus (COVID-19) preparedness plans. According to DFS, the move was necessary to ensure that companies have plans in place to deal with any financial or operational risks related to the virus outbreak.
The guidance notes:
COVID-19 has already had adverse economic effects domestically and globally. 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.
To that end, DFS requires that each regulated institution submit a response to DFS describing the institution’s plan of preparedness to manage the risk of disruption to its services and operations. Responses are to be provided to DFS as soon as possible and in no event later than thirty (30) days from the date of this letter.
The guidance listed specific things that each plan should address, including measures to minimize disruption to the business, a scalable response strategy, and an “assessment of all facilities, systems, policies and procedures necessary to continue critical operations and services if members of the staff are unavailable for longer periods or are working off-site.”
In addition, the Department wants to receive an assessment of the potential for increased cyberattacks and fraud, strategies for protecting employees from the virus, and plans for communicating risks to customers. DFS also requested plan details for assessing the virus’ impact on asset valuation, earnings, profits, and institutional liquidity.
DFS reminded the companies that they are obligated to notify the department if their net worth declines below their capitalization requirement threshold.