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The New York State Comptroller’s office has raised considerations over potential deficiencies within the Department of Financial Services’ (DFS) oversight of the cryptocurrency trade.
In a report launched earlier this month, the comptroller highlighted dangers stemming from the DFS’ BitLicense program, which requires crypto companies to acquire a state license. The report questioned whether or not the DFS totally vets candidates and constantly screens licensees’ monetary stability and cybersecurity.
A key fear is the four-year lag between license candidates submitting anti-money laundering threat assessments and approvals. This delay leaves open the likelihood that outdated data guides licensing choices.
Moreover, the report doubted current licensees’ cybersecurity credentials, given the trade’s vulnerability to theft and fraud. Though the DFS up to date cyber requirements final November, the comptroller urged additional motion to handle recognized shortcomings and guarantee well timed security examinations.
“We discovered there’s restricted assurance that DFS is sufficiently performing oversight associated to BitLicenses, creating the danger that licenses might be granted with out verifying monetary stability or that companies might not preserve requirements as soon as licensed,” the report abstract acknowledged.
The BitLicense is taken into account one of many hardest state digital forex rules. Nonetheless, the comptroller emphasised the necessity for fixed monitoring of licensees’ practices to handle the recognized gaps. With cryptocurrency oversight within the nationwide highlight, the report calls into query New York’s capability to function an efficient trade watchdog.
Additionally learn: Standard Chartered Sees $50-100B Boost in Bitcoin ETFs
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