The New York Department of Financial Services (NYDFS) has revised its crypto custody guidelines, mandating that custodians maintain customer assets in separate on-chain wallets or ledgered omnibus wallets. This update, which also prohibits using customer crypto as collateral and restricts the use of sub-custodians, comes as Superintendent Adrienne Harris prepares to step down on October 18. Kaitlin Asrow will assume the role of acting superintendent. These changes are designed to enhance asset recoverability and provide legal clarity during insolvency, impacting firms under the NYDFS BitLicense framework.