The New York State Department of Financial Services (NYDFS) recently announced that it will start charging cryptocurrency companies registered in the state for annual examination and supervision. This move is part of the regulator’s efforts to align the cryptocurrency sector more closely with banking institutions and insurance firms, which are also required to pay annual fees to the NYDFS in exchange for supervision.
The fees will be different for each firm, depending on their size and complexity. Firms will pay fees five times per fiscal year, with four estimated quarterly settlements and one based on the actual expenses. The amendment coincides with the beginning and end of New York’s budgetary year, which runs from April 1 to March 31.
The NYDFS adopted the Bitlicense regulatory regime in 2015, which requires crypto businesses to meet various standards for capitalization, anti-money laundering protocols, and cyber-security protection. This new rule will apply to those entities which have already obtained the Bitlicense.
It aims to provide a service to the industry by working hand-in-hand with regulators and examiners to identify issues early and better oversee the markets and protect consumers. This collaboration could benefit the local digital asset sector, according to Superintendent Adrienne Harris.
The NYDFS has previously urged companies operating in the state to set apart clients’ cryptocurrency holdings from their own assets and to keep a clear internal audit trail. The regulator believes that a comprehensive regulatory framework is vital to protecting customers and preserving trust.
Eric Soufer, an executive at consulting firm Tusk Strategies, praised the NYDFS for its approach toward the crypto field, saying:
“I think the industry recognizes that New York is the only state that regulates crypto in a comprehensive and proactive way.”