NYDFS Adopts New Supervisory Fees Rule For Crypto Companies With Bitlicense
In a press release published on Monday, April 17th, the New York State Department of Financial Services (NYDFS) announced it has adopted new rules aimed at governing cryptocurrency companies licensed to operate in the state. The new framework primarily concerns the collection of supervisory fees from firms and will enable the watchdog “to continue adding top talent to its virtual currency team”.
NYDFS Adopts New Rules Aimed at Governing Crypto Firms In The State
This Monday, the NYDFS announced it has adopted new rules pertaining to digital assets firms operating in the state under the Bitlicense issued by the watchdog. The license is notoriously difficult to obtain and the regulator hopes the new rule will help maintain a high standard among cryptocurrency firms intent on servicing New Yorkers.
As the first prudential regulator of virtual currency in the nation, New York has created a framework that sets the highest standards for safety, soundness, and consumer protection while fostering responsible growth. This regulation provides the Department with 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.DFS Superintendant Adrienne A. Harris
According to the press release, the rule primarily concerns the collection of supervisory fees from cryptocurrency companies. It will expand the powers of the NYDFS and enable it “to continue adding top talent to its virtual currency team to continue efficient and effective regulatory oversight. “ According to the watchdog, the rule is closely modeled to those aimed at governing the banking sector.
Over the previous months, the NYDFS has become increasingly aggressive in its pursuit to regulate digital assets firms. In February, the agency ordered the stablecoin issuer Paxos to stop minting its Binance-branded BUSD, and in March it sued KuKoin alleging it is operating without the above-mentioned Bitlicense in the state.
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The Slow Work on a Digital Assets Framework in the US
While digital assets have been more than present for over a decade in the US, the country has done relatively little to create a clear regulatory framework for them. Last September, the White House finally offered its document on the matter but several months later, at the start of 2023, it came out once again stating that Congress needs to step up its efforts when it comes to cryptocurrencies.
So far, the Securities and Exchange Commission has been the most active when it comes to regulating the digital assets industry. And while it has been making an effort to expand and standardize its framework, it has widely been criticized for what many believe to be speaking about regulation through enforcement actions. Commissioner Hester Peirce has been a particularly vocal critic of the approach and has accused her agency of being “lazy and paternalistic” in her response to a $30 million settlement with Kraken.
While legislators at the federal level have been slow, to act, individual states have proven more active when it comes to passing cryptocurrency-focused laws. Previous months saw multiple states passing various laws intended to protect the right of Bitcoin miners to continue doing business without facing discrimination of various kinds. Additionally, Wyoming elected to enshrine privacy protection through a law maintaining the secrecy of individuals’ private keys.
Do you think NYDFS’ new rules will help New Yorkers get better service from cryptocurrency platforms? Let us know in the comments below.