Summary
The New York State Comptroller has raised concerns about the oversight of cryptocurrency companies in the state. The Comptroller’s report found that the Department of Financial Services (DFS) has limited assurance that it is adequately overseeing the application and supervision of BitLicenses, which allow businesses to engage in cryptocurrency activities. The report highlighted risks such as licenses being granted to applicants without thorough financial verification and businesses failing to maintain financial or cybersecurity standards. Additionally, some applicants did not complete the necessary steps for background checks. The report also noted that the cybersecurity systems of BitLicensees were not in compliance with DFS regulations. To address these concerns, the report suggested implementing an adequate follow-up process. The DFS recently announced the VOLT initiative to improve oversight into crypto companies.
Key Points
1. New York State Comptroller Thomas DiNapoli expressed concern about the limited assurance of oversight by the Department of Financial Services (DFS) regarding BitLicenses in the state.
2. The Comptroller’s report highlighted the risk of granting licenses to applicants with insufficient financial stability and the potential for businesses to neglect financial or cybersecurity standards.
3. The DFS failed to receive cybersecurity compliance and financial statements from BitLicensees, and the report suggested implementing an adequate follow-up process to address these concerns.