For breaking cybersecurity laws, bitFlyer USA received a penalty from the New York State Department of Financial Services (NYDFS).
The New York State Department of Financial Services (NYDFS) fined cryptocurrency exchange bitFlyer USA for breaking cybersecurity laws. The crypto exchange was penalized with a $1.2 million civil monetary fine by the NYDFS for failing to keep a compliance cybersecurity program in place.
Since 2017, BitFlyer USA, a division of bitFlyer Holdings, has been granted a license to conduct business in New York. The NYDFS recognizes the cryptocurrency exchange’s efforts to enhance its cybersecurity program before the end of the year.
BitFlyer USA Fined By NYDFS
The New York State Department of Financial Services penalized bitFlyer USA $1.2 million for breaking cybersecurity laws, according to a consent order from May 2. In the United States, BitFlyer USA offers services for custodial wallets and cryptocurrency trading.
Since granting a license under the Virtual Currency Regulation and Cybersecurity Regulation in 2017, the NYDFS has been investigating bitFlyer USA. The cybersecurity program for the exchange included numerous flaws, according to the NYDFS.
BitFlyer USA, according to the New York regulator, did not completely abide by the Cybersecurity Regulation. As required by the Virtual Currency Regulation, it also failed to design and maintain an efficient cybersecurity program through written policies. The exchange has used bitFlyer Japan for a variety of services, including audits, innovations, and customer support.
“bitFlyer USA had violated 23 NYCRR 200.16(a) by failing to implement a cybersecurity program that was intended to safeguard its electronic systems from unauthorized use and failing to conduct a thorough risk assessment as required by 23 NYCRR 500.09(a).”
A deadline of December 31, 2023, has been set by the authority for the cryptocurrency exchange to improve its cybersecurity measures. The NYDFS acknowledges bitFlyer USA’s ongoing efforts to address the issues listed in the settlement order, though.
NYDFS Adopts Strict Crypto Regulations
Recently, the NYDFS has maintained a strict regulatory stance toward the cryptocurrency market, fining and prosecuting crypto companies.
In fact, after ordering Binance to halt minting BUSD in February, the New York regulator’s action against Paxos presented significant difficulties for the exchange. The NYDFS penalized companies including Coinbase, BitPay, and Robinhood while maintaining its strict policy.