The fiscal year 2022-2023 budget for New York, which takes effect in two months, includes requiring the New York Department of Financial Services (NYDFS) to charge a new “assessment” to all virtual currency businesses licensed in New York in order to “defray operating expenses.”
The legislation, signed by New York Governor Kathy Hochul on April 9, requires NYDFS to charge the crypto companies it licenses for the operating expenses and supervisory costs associated with their regulation through its BitLicense program, which was launched in 2015. The budget language provides Section 206 of the New York financial services law will be amended to add a new subsection (d-1) to read: “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.” Instead of identifying a specific amount to be assessed, companies engaged in virtual currency business activity “shall be assessed by the superintendent for the operating expenses of the department that are solely attributable to regulating such persons in such proportions as the superintendent shall deem just and reasonable.” Reportedly, the NYDFS expects to develop a formula for calculating fees in consultation with the crypto industry stakeholders.
In an April 9 press release, NYDFS Superintendent Adrienne A. Harris said: “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.”