NYDFS will charge cryptocurrency companies for supervision
The new rule will apply to New York firms holding the state's BitLicense.
The New York Department of Financial Services (NYDFS) said April 17 that it will impose supervision charges on crypto firms.
NYDFS introduces regulation allowing charges
Adrienne Harris, NYDFS Superintendent of Financial Services, said:
“This regulation provides the Department with additional tools and resources to regulate the virtual currency industry now … as innovators create new products and use cases for digital assets.”
According to the announcement, the new regulation will allow the NYDFS to collect supervisory costs from virtual companies licensed under the state’s Bitlicense.
Elsewhere, The Wall Street Journal has quoted statements from Harris suggesting that fees will be determined based on the complexity and size of the relevant cryptocurrency company. Companies will be billed five times per fiscal year.
Licensed companies in other areas of the financial sector, such as those working in the banking and insurance industries, already pay the same costs to the NYDFS.
Harris said that the change in policy would allow companies to work more closely with the NYDFS through supervision and examination. This will help companies detect issues sooner and will provide protections to consumers, she explained.
Revenue gained from the fees will also allow the NYDFS to hire more staff.
New York has strict crypto policies
Despite the regulator’s positive framing of the change, New York is recognized for its strict regulations around cryptocurrency. To date, just 33 companies have obtained a New York virtual currency license (aka “Bitlicense”) or a related charter.
Those strict policies extend to regulatory actions. In January, the NYDFS settled with Coinbase for $100 million over its insufficient AML requirements. Meanwhile, the New York Attorney General’s office has recently filed charges against crypto companies that are not registered with the state, including CoinEx and KuCoin.
Additional fees, such as those announced today, could discourage companies with fewer resources from attempting to operate in the state.