New York State Auditor General Questions State Financial Regulator’s Handling of BitLicense Regime

A report released in January by the office of New York State Comptroller Thomas DiNapoli questioned the thoroughness and effectiveness of the so-called BitLicense program in New York. Since 2015, New York has required any digital asset provider operating in the state to obtain a license and undergo ongoing scrutiny by local financial regulators. Led by Adrienne Harris, DFS stressed that it is closely monitoring any activity related to the asset class, including from banks. Companies including Paxos Trust Co., Robinhood and Coinbase Global Inc. have fallen foul of Harris' system, with penalties ranging from outright bans on certain operations to paying hefty fines. However, the Auditor General's Office found that "DFS may not have adequately discharged its oversight responsibilities for the BitLicense program." These perceived deficiencies in oversight could result in licenses being awarded to applicants who lack the necessary financial stability or cybersecurity standards, the audit team wrote in a statement accompanying the report. (Bloomberg)