NYDFS Proposes Charging Virtual Currency Businesses Admin Costs

A New York regulator has proposed charging licensed cryptocurrency businesses for its costs.

The New York State Department of Financial Services (DFS) said in a Thursday (Dec. 1) press release that the collection of these supervisory costs would be similar to what is done with other licensed financial institutions in the state and would enable the department to continue adding top talent.

“This assessment authority will allow the department to continue building the team that is leading the nation with a suite of regulatory tools,” Superintendent of Financial Services Adrienne A. Harris said in the release. “The ability to collect supervisory costs will help the department continue protecting consumers and ensuring the safety and soundness of this industry.”

The release said the DFS provides transparent and timely rules that ensure the safety and soundness of the entities it regulates, protects consumers and combats financial crimes.

The department enforces standards around capitalization, reserving and redemption, cybersecurity and anti-money laundering (AML), and prohibits lending of customer assets for institutional profit, the release said.

As PYMNTS reported in January, the DFS is one of the toughest and most-respected regulators of cryptocurrency in the country.

It controls New York’s BitLicense, which has long been seen as the gold standard in the regulation of cryptocurrency businesses in the United States. It is a regime so tough that many perfectly legitimate companies fled the state but has also given those that stay substantial credibility within the traditional finance community.

“New York State has been regulating virtual currency companies since 2015 with a robust prudential framework,” Harris said in the Thursday press release. “Through licensing, supervision and enforcement, we hold companies to the highest standards in the world.”

The proposal is subject to a 10-day preproposal comment period that began Thursday, followed by a 60-day comment period, before DFS reviews the comments and then revises the proposal or adopted the final regulation.