New York stateās efforts to enforce sanctions against Russia have ramped up a gear with the Department of Financial Services, or DFS, expediting the procurement of additional blockchain analytics technology.
According to a statement released Wednesday, the department will use the technology to help detect exposure to Russian individuals and entities subject to federal sanctions, by the virtual currency businesses licensed by the department.
NY Gov. Kathy Hochul issued an executive order on Feb. 27 directing state agencies to divest from Russian institutions and companies, as well as entities that provide them with support. She said:
āNew York is proudly home to the nationās largest Ukrainian population and we will use our technological assets to protect our people and show Russia that we will hold them accountable.ā
New York requires individuals and companies engaged in a number of activities with virtual currency to apply for a BitLicense. The DFS is now āassessing a number of technology tools and service providers to augment current supervisory capabilities.ā No other details were given about the analytics technology the state is looking for.
The DFS held a techsprint ā āintense problem-solving sessions meant to facilitate innovation, collaboration and creative solutions to difficult problemsā ā to design a digital regulatory reporting mechanism for virtual currency companies in March 2021. It was noted at the time that event organizers were working with some of the participants to advance the development of their solutions.
Blockchain analysis is typically used to assure Anti-Money Laundering compliance and customer protection. The process often combines the tracing of transfers on the blockchain with information obtained off-chain to understand transactions.