New York Senate Authorizes NYDFS to 'Assess' Crypto Companies

The state regulator oversees the state's landmark virtual currency license, commonly referred to as the BitLicense.

AccessTimeIconApr 9, 2022 at 6:49 p.m. UTC
Updated May 11, 2023 at 5:06 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

The New York State Senate is boosting the Department of Financial Services’ (NYDFS) efforts to oversee the cryptocurrency sector.

The Senate passed its fiscal year 2023 budget early Saturday, which included a provision tasking NYDFS with developing a new “assessment” or charge for the cryptocurrency companies it oversees, to bring its oversight mandate in virtual currencies in line with how the regulator oversees more traditional banks and financial services firms.

The assessments are meant to “defray operating expenses,” according to the text of the budget reviewed by CoinDesk, and are only meant to cover expenses tied directly to the oversight of crypto companies.

“The expenses of every examination of the affairs of any person regulated pursuant to this chapter that engages in virtual currency business activity shall be borne and paid by the regulated person so examined, but the superintendent, with the approval of the comptroller, may in the superintendent's discretion for good cause shown remit such charges,” the text of the budget said.

NYDFS oversees the U.S.’s most developed cryptocurrency regulation through its virtual currency licensing regime, commonly known as the BitLicense. Companies hoping to offer New York residents access to cryptocurrency trading or wallet services must secure a BitLicense before they can set up shop.

In a statement, NYDFS Superintendent Adrienne Harris said the budget would “revitalize our state’s economy and create a stronger New York.”

“The budget includes a new authority to collect supervisory costs from licensed virtual currency businesses, like the Department already does for banking and insurance companies. New York was the first to start licensing and supervising virtual currency companies, and we continue to attract more licensees and the most crypto startup funding of any state in the nation. This new authority will empower the Department to build staff with the capacity and expertise to best regulate and support this rapidly growing industry,” she said.

The new budget provisions will take effect in two months.

DISCLOSURE

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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.


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.