The New York Department of Financial Services (NYDFS) has issued a letter to about eighteen major cryptocurrency firms to come up with a contingency plan including all details for facing the COVID-19 epidemic in the next 30 days.
The plan must address nine major guidelines covering all the issues, such as how they are going to face the losses and what measures have been taken to make their employees feel safe and secure should be jotted down according to the March 10 letter.
“COVID-19 has already had adverse economic effects domestically and globally. It is critical that each regulated entity establishes plans to address how it will manage the effects of the outbreak and assess disruptions and other risks to its services and operations,” the letter inferred.
Cryptocurrency companies are more likely to face fraud and corruption threats by attackers who are most likely to take advantage of COVID-19. The agency alerted about “increased instances of hacking, cybersecurity threats, and similar events, as bad actors attempt to take advantage of a COVID-19 outbreak, and the possible resulting need for heightened security measures, such as enhanced triggers for fraudulent trading or withdrawal behavior.”
Coinbase has already given out a contingency plan in February, “We have a standing Crisis Management Team continually reviewing new information as it comes in. We have established a four-tier escalation ladder (from level 0 to level 3) in response to changes that impact Coinbase offices.”
Coinbase has also banned travel to Italy, China, Hong Kong, Japan, and South Korea. Employees will be allowed to work from home during the last tier phase. Tier 0 includes all the exchange’s offices except Japan, which is from tier 1.
“We expect that the measured mortality rate (once low-severity cases are included in the overall count) will fall significantly and that we’ll see limited transmission in the west, where there will be fewer high-density multi-generational housing situations.”
Instead of coronavirus concerns, a major sell-off of risk assets caused bitcoin to drop below $4,000, the lowest price since March 25, 2019. The asset currently has a YTD loss of 27%, despite having risen 46% in February when it was trading at $10,500.