As the coronavirus outbreak is getting more intense, the New York Department of Financial Services (NYDFS) has issued guidelines for the digital currency exchanges under its purview to come up with contingency plans.
Published on Tuesday, the state regulator asked companies to provide details of their preparedness plans in place to address the operational and financial risk posed by the spread of a novel coronavirus known as SARS-CoV-2.
The preparedness plans must include measures to tackle operational disruption, and a leveled approach in strategy addressing the impact of the outbreak.
Virtual currency exchanges also need to make plans for potential increased risk of cyber-attacks and fraud due to an outbreak and need to assess the preparedness of critical third-party service providers and suppliers.
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“From a financial perspective, regulated entities may be impacted by COVID-19 in a variety of ways,” the state regulator stated. “For example, they may be exposed, as a result of the virus’s impact on consumers, counterparties, and vendors, to declining revenues, stock market declines and interest rate changes, supply chain and service disruptions, and decreases in the value of assets and investments.”
All markets are in red
Both the traditional and digital asset markets saw a massive impact by the COVID-19 outbreak. When many were taking crypto investments as safe-haven from the slumping stock markets for days, Bitcoin, along with all other coins, turned red yesterday.
The crypto market saw one of the steepest downwards movement shedding value in double-digits in merely an hour. Bitcoin almost touched $4,100 today before showing some signs of recovery, while other coins are still bleeding.
Notably, due to a massive slum in Ethereum prices, MakerDAO, one of the hyped decentralized finance (DeFi) projects, is now facing $4 million in bad debts, and just avoided shut down of the protocol.