New York comptroller says the financial regulator ‘needs to do more’ on BitLicense program

The New York Department of Financial Services needs to “do more to ensure that BitLicenses are granted to financially stable applicants,” the comptroller said

article-image

Jim Barber/Shutterstock modified by Blockworks

share

New York State Comptroller Thomas DiNapoli didn’t mince words when digging into the state’s oversight into crypto companies. 

“We found there is limited assurance that [Department of Financial Services] is adequately performing its oversight responsibilities related to the application for and supervision of BitLicenses in the state,” the report says.

The BitLicense program, initiated by the NYDFS in June 2015, aims to provide a well-regulated way for New Yorkers to access digital currencies.

The Comptroller’s concern stems from the possible “risk that licenses could be granted to applicants whose financial stability has not been thoroughly verified or that, once licensed, businesses may not maintain financial or cybersecurity standards.”

Upon investigation, some of the applicants for a BitLicense didn’t complete the necessary steps for the state to run background checks. Out of 8 applicants, 2 failed to finish the fingerprinting process meaning that the Department would have been unable to finish the background checks into “major shareholders and officers prior to application approval.”

Read more: NY Authorities To Collect More Fees From Crypto Companies

The Comptroller’s report also found that the cybersecurity systems of BitLicensees “were not in compliance” with DFS regulations. The financial regulator failed to hand over both quarterly and annual financial statements for the eight BitLicenses assessed by the comptroller’s office.

According to the report, the Supervision team must review both the quarterly and annual reports to ensure that a BitLicensee is compliant. 

To combat the comptroller’s concerns, the report suggests that the DFS ensure an adequate follow-up process is implemented.

NYDFS superintendent Adrienne Harris announced the VOLT initiative which aims to improve the financial regulator’s oversight into crypto companies. VOLT stands for vision, operations, leadership and technology. 

The audit took place over a span of a few years from July 2018 to July 2023.

The BitLicense program launched in 2015, giving certifications out to businesses engaging in crypto activities including story, selling and issuing digital assets in the state. Outside of BitLicenses, crypto firms can also apply for a charter under the New York Banking Law which would allow them to conduct some crypto business activities. 

Earlier this year, the NYDFS proposed a new rule that would change coin listing guidelines, including requiring companies to mandate a coin delisting process. 

Harris has announced multiple actions against crypto companies operating in the state. Last January, the DFS announced a $100 million settlement with Coinbase after the company failed compliance checks by the agency.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Flashnote Template (6).png

Research

Trading of the President's TRUMP memecoin sent the market capitalization to over $15B, resulting in all-time highs for Solana’s Real Economic Value, DEX volumes, and stablecoin supply. This event further validates Solana as the venue for high-throughput onchain activity, with Solana DEXs and DeFi applications as primary beneficiaries, while also signaling to further experimentation, utilization, and adoption of memecoins as legitimate financial instruments for speculation, crowdfunding, or capital formation. President Trump’s continued willingness to experiment in crypto reaffirms a highly-favorable political and regulatory climate for the industry.

article-image

Donald Trump has slightly backed off from the ambitious tariff goals he touted on the campaign trail

article-image

Some have called it “a relief” that the task force will be led by the crypto-friendly Hester Peirce

article-image

By leveraging L1 validators for proofing and execution, native rollups remove the need for centralized sequencers and complex governance

article-image

The new task force shows that crypto’s officially entering a new era

article-image

After seven long years, ICOs could be back on the menu

article-image

The Solana network housed around $6.1 billion stablecoins on Friday, according to Blockworks Research data