NYDFS Announces Increases in Russian Sanction Enforcement Actions

On March 2, 2022, the New York Governor Kathy Hochul announced that the New York Department of Financial Services (“NYDFS”) will take action to increase its enforcement actions in pursuit of Russian sanctions. These enforcement actions include expediting the “procurement of additional blockchain analytics.”

This analytical increase will permit NYDFS to detect exposure among regulated virtual currencies that are being sent to Russian citizens, financial institutions, or organizations—the practice of which has been sanctioned by the Biden Administration.

Despite these sanctions, Superintendent of Financial Services Adrienne A. Harris acknowledges that there are bad actors who will attempt to use these virtual currencies to evade sanctions and work against the United States’ efforts to prevent money laundering, terrorist financing and ransomware activity.

In order to prevent these bad actors from succeeding in their intended efforts, NYDFS will be  “[l]everaging purpose-built technologies and service providers for virtual currency” to conduct real-time monitoring which will permit them to issue enforcement action.