He New York State Comptroller's Office has raised concerns about possible deficiencies in the Department of Financial Services' (DFS) supervision of the cryptocurrency industry.
in a report Released earlier this month, the comptroller highlighted risks arising from DFS's BitLicense program, which requires crypto companies to obtain a state license. The report questioned whether DFS thoroughly vets applicants and continually monitors the financial stability and cybersecurity of licensees.
A key concern is the four-year delay in license applicants submitting anti-money laundering risk assessments and approvals. This delay leaves open the possibility of outdated information guiding licensing decisions.
Additionally, the report doubted the cybersecurity credentials of existing licensees, given the industry's vulnerability to theft and fraud. Although DFS updated cyber standards last November, the comptroller urged additional steps to address identified deficiencies and ensure timely security reviews.
"We found that there is limited assurance that DFS is adequately conducting oversight related to BitLicenses, creating the risk that licenses may be granted without verification of financial stability or that companies may not maintain standards once authorized," the summary states. report.
The BitLicense is considered one of the strictest state regulations on virtual currencies. However, the comptroller emphasized the need for constant monitoring of licensees' practices to address identified gaps. With cryptocurrency oversight in the national spotlight, the report questions New York's ability to serve as an effective industry watchdog.
Also read: Standard Chartered Sees $50-$100 Billion Rise in Bitcoin ETFs
