NYDFS Sets a New Compliance Benchmark for Digital Asset Exposure
TL;DR
The New York Department of Financial Services now expects banks to monitor blockchain-related risk as part of their compliance programs. This includes wallet screening, exposure analysis, transaction tracking, and risk-based decision-making. Scorechain provides the tools to meet these expectations and strengthen compliance programs across jurisdictions.
The New York Department of Financial Services has formally outlined its expectation that banks under its supervision implement blockchain analytics when dealing with digital asset-related activity.
This guidance, released in September 2025, applies to state-chartered banks and foreign branches licensed in New York. It extends prior expectations placed on virtual currency entities to traditional financial institutions that are now increasingly exposed to crypto activity.
The NYDFS expects these institutions to integrate blockchain monitoring into their compliance frameworks. Institutions must be able to screen customer wallets, verify source of funds, evaluate exposure to virtual asset service providers, and detect indicators of illicit finance or sanctions violations.
These capabilities are no longer considered optional enhancements. They are now part of baseline risk oversight.
Although this guidance is not a new law, it defines supervisory standards that NYDFS will use in reviewing institutions’ internal controls. Compliance programs that lack visibility into blockchain activity may be deemed insufficient.
For many institutions, this presents both a risk and a strategic opportunity. Those that act quickly can reduce regulatory exposure and improve their risk posture in an increasingly digital financial environment.
Not Just a New York Issue
While this guidance originates in New York, its relevance is broader.
Regulators across jurisdictions are moving in a similar direction. In Europe, Asia, and other U.S. states, financial supervisors are issuing stronger requirements around digital asset risk. The message is clear. Institutions must understand how digital assets interact with their infrastructure, customers, and operations.
Blockchain analytics is becoming a core element of modern compliance. Financial institutions are expected to interpret blockchain activity with the same rigor applied to traditional financial behavior.
This includes assessing whether a transaction pattern is consistent with declared customer behavior, determining exposure to high-risk counterparties, and establishing thresholds that trigger review. Static rules are no longer enough. Institutions are now expected to act on real-time, risk-based data.
Operationalizing Blockchain Risk Management
Meeting these expectations requires more than visibility. It requires the ability to act on blockchain data.
Financial institutions need tools that translate blockchain activity into compliance actions that are measurable, repeatable, and auditable. That means integrating risk signals into existing workflows and ensuring decisions are consistent with internal governance and external obligations.
This presents a particular challenge for institutions new to blockchain infrastructure. While many compliance programs are built around traditional financial data, blockchain activity behaves differently. Wallets are pseudonymous. Transactions are irreversible. Risk must be assessed in context, not just flagged by rules.
Institutions need analytics capabilities that help their teams move beyond alerts and into structured responses.
Scorechain’s Approach
Scorechain helps financial institutions align their compliance operations with evolving regulatory standards for digital assets.
Our platform is designed to support the monitoring of wallets, the tracing of transaction flows, the evaluation of counterparties, and the scoring of blockchain-related risk. It is built to fit into institutional governance and compliance frameworks, not to replace them.
Our clients use Scorechain to detect abnormal behavior, manage exposure to high-risk virtual asset service providers, and produce documentation suitable for audit and regulatory inspection.
By combining technical accuracy with compliance usability, Scorechain supports risk professionals in delivering clear decisions and defensible processes.
Ensure your compliance framework meets the latest regulatory expectations.
Talk to our team about how Scorechain can support your blockchain analytics and risk management strategy.
