New York Governor Proposes Giving Financial Watchdog More Teeth

Andrew Cuomo wants to give the Department of Financial Services more powers in regulating certain licensed entities, including crypto startups.

AccessTimeIconJan 9, 2020 at 9:00 a.m. UTC
Updated Sep 13, 2021 at 12:07 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

New York Governor Andrew Cuomo wants to give the Department of Financial Services (NYDFS) more powers in regulating certain licensed entities, including cryptocurrency startups.

Cuomo presented his 2020 "State of the State" report on Wednesday, a 321-page list of proposals including a new look at exemptions that currently exist for certain consumer financial products and services.

While NYDFS, the creator of the notoriously hard to acquire "BitLicense," can already bring enforcement actions against unlicensed entities, some companies can claim they are not subject to the regulator because they do not directly sell their products to consumers.

Further, insurance and banking laws grant NYDFS the authority to collect costs for assessments but companies operating under the Financial Services Law are not explicitly required to pay up.

"Entities licensed under the FSL (e.g. virtual currency entities) are not required to pay such assessments, despite being subject to similar examination and oversight requirements," the document reads.

Cuomo wants to amend the law to close these loopholes, according to the report.

NYDFS has regulated cryptocurrency startups under its virtual currency license since mid-2014. Superintendent Linda Lacewell announced in October the agency was reviewing the regime, citing the crypto industry's evolution since the BitLicense was proposed.

Changes to be considered include a modification to the approval process for listing cryptocurrencies and a model framework for coin listings that exchanges can use. NYDFS is accepting public comment through Jan. 27.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.