NYDFS implements new rule to charge crypto firms above annual supervisory fees

Despite the global crypto market showing a bullish trajectory, regulatory investigation could become an obstacle for the nascent industry. Earlier today, the New York Finance Watchdog implemented a new set of rules to bill licensed crypto firms over regulatory fees.

This bill mainly targets New York crypto firms registered under the BitLicense. This requirement allows a company to conduct virtual currency business in New York or with a New York resident.

Crypto firms must be charged for supervisory costs

According to one announcement, cryptocurrency companies registered under the state of New York will begin receiving bills over regulatory fees. The fees collected from this regulation will reportedly help the regulator add “top talent” and additional resources.

New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris noted:

This regulation gives the department additional tools and resources to regulate the virtual currency industry now and in the future, as innovators create new products and use cases for digital assets.

Notably, this new rule related to appraisal fees was originally proposed in December 2022. NYDFS noted that it had consulted with industry stakeholders and conducted research before establishing this new rule. says Harris these assessment costs will “go a long way to help the space grow and help it grow safely.”

Harris added:

When you can work hand-in-hand with your regulator and your investigators, we can help identify problems early before they metastasize, and that’s really a service we can provide to the industry, and it helps us as regulators better monitor the markets and protect consumers.

Furthermore, the new rule is said to be measured based on the formula of the particular crypto company’s size and complexity. In addition, the bill for the supervision costs will be issued to crypto firms five times during a financial year.

This includes four approximate quarterly supervisory adjustments based on crypto the company’s total expenses for the year in question. It’s worth noting that this new rule aligns with traditional banks’ appraisal fee bills that the NYDFS ultimately uses for its operations.

Crypto firms register under the BitLicense

The BitLicense was introduced under the NYDFS regulatory regime in June 2015. This licensing requirement is somewhat similar to traditional banking supervisory requirements.

Crypto firms are asked to meet specific requirements related to, among other things, financing, safeguarding against cyber threats and implementing measures to prevent money laundering.

When this regulatory regime was introduced, the NYDFS had not included anything related to assessment costs. So far, the NYDFS has only listed 33 crypto- and blockchain companies registered under BitLicense.

Regardless of the news circulating in the industry, the global crypto market has remained calm. Over the past 24 hours, the global crypto market capitalization has fallen by just 1.8% at the time of writing, with a value over $1.3 trillion.

Featured image from Unsplash, chart from TradingView