New York Finance Regulator to Bill Crypto Firms for Annual Supervision Fees
The assessment fees will in part be based on a formula of a crypto firm’s size and complexity, Superintendent Adrienne A. Harris said. Photo: Christopher Goodney/Bloomberg News By Mengqi Sun April 17, 2023 1:43 pm ET The New York State Department of Financial Services said it would start charging cryptocurrency firms registered in the state for the costs of annual supervision and examination. The new rule, adopted Monday and applying to those holding a so-called Bitlicense, aligns the crypto sector more closely with how the agency bills insurance and banking firms in New York for the assessment fees that fund the agency’s operations. The assessment charges, proposed in December, will help the New York regulator bring in additional resources and hire more staff to expand its vir
The assessment fees will in part be based on a formula of a crypto firm’s size and complexity, Superintendent Adrienne A. Harris said.
Photo: Christopher Goodney/Bloomberg News
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The New York State Department of Financial Services said it would start charging cryptocurrency firms registered in the state for the costs of annual supervision and examination.
The new rule, adopted Monday and applying to those holding a so-called Bitlicense, aligns the crypto sector more closely with how the agency bills insurance and banking firms in New York for the assessment fees that fund the agency’s operations.
The assessment charges, proposed in December, will help the New York regulator bring in additional resources and hire more staff to expand its virtual currency unit, the agency said.
The NYDFS has beefed up its digital asset unit staffing over the past year, Superintendent Adrienne A. Harris said recently at a crypto industry conference. She said the crypto unit now employs more than 50 people.
The assessment fees will in part be based on a formula of a crypto firm’s size and complexity, Ms. Harris said at the conference. The assessment, she said, will ultimately “go a long way toward helping the space grow and helping make sure it grows safely.”
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The NYDFS adopted its virtual currency regulatory regime, known as the Bitlicense, in June 2015, and was one of the first agencies in the country to do so. The licensing requirements, modeled after its banking supervision requirements, asks crypto businesses to meet certain standards for capitalization, cybersecurity protection and anti-money-laundering protocols, among others.
The regulation at the time didn’t include a provision for assessment costs, the NYDFS said. The agency said it has done research and met extensively with industry stakeholders to inform the new regulation before adopting it. Those licensing a limited purpose trust company or a banking organization will continue to be examined under existing laws.
Each crypto firm will be billed five times for a fiscal year, four estimated quarterly assessments and one true-up based on the firm’s actual expenses for the year, the new regulation said. The regulation also coincides with the beginning of New York state’s fiscal year, which begins April 1 and ends March 31 each year.
Write to Mengqi Sun at [email protected]
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