New York’s financial watchdog has warned crypto companies that their BitLicense applications could be thrown out without warning if its feedback is not heeded.
In an Wednesday, New York’s Department of Financial Services (DFS) said a new three-strikes rule would authorize it to deny any applications that didn’t address or consider any deficiencies highlighted by the regulator.
The warning reads, “[I]f all deficiencies involving a particular application requirement or set of requirements have not been fully and effectively addressed by the end of the response period for the third deficiency letter … the DFS may, without further notice, deny the application.”
The new rule coincides with the , which saw the regulator update its framework for businesses, like exchanges and wallets providers, to operate legally in New York State. To date, have been approved, with 19 receiving actual licenses and six receiving limited purpose trust charters.
The most recent successful applicant was derivatives clearinghouse ErisX, which at the start of May.