NY Governor Wants Crypto Firms to Cover Costs for NYDFS Oversight
Cryptocurrency entities licensed under the New York’s Financial Services Law (FSL) should pay the costs of regulatory oversight, Governor Andrew Cuomo believes.
The Democratic Governor purportedly wants the state authorities to amend the FSL in order to require virtual currency-related entities within the FSL jurisdiction to foot the bill for examination and oversight conducted by New York State Department of Financial Services (NYDFS).
The NYDFS is one of primary regulatory agencies for crypto-related businesses in New York state as the regulator issues a major business license for cryptocurrencies, the BitLicense. As the home of the financial capital of the United States, the NYDFS is often at the front line of new regulation.
Cuomo wants crypto businesses to pay for NYDFS oversight to “make progress happen”
Cuomo revealed his amendment proposal in his state of the state speech in New York on Jan. 8, where the Governor outlined his “Making Progress Happen” agenda. The crypto-related FSL amendment is part of Cuomo’s 2020 state of the state book, a 321-page list of policies suggested by the Governor to improve the economy of the state.
Specifically, Cuomo wants to put virtual currency businesses on an “an even footing with other financial services companies” that are required to pay assessments to the NYDFS to cover the costs of oversight. The document reads:
“Under current law, supervised entities that are licensed under the Insurance Law or Banking Law are required to pay assessments to DFS to cover the cost of examination and oversight. 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 Governor proposes to amend the FSL to place such entities on an even footing with other financial services companies.”
Cointelegraph contacted the Governor's press office in order to get more clarity what virtual currency entities are particularly meant in this context. Cointelegraph has also requested some BitLicense bearers including crypto trading app Robinhood and financial firm SoFi to comment on the matter. This article will be updated pending any new information.
NYDFS to soon update its BitLicense for the first time in 5 years
The NYDFS, also referred to as the DFS, is a department of the New York state government that regulates financial services and products in such fields as insurance, banking and financial services. The authority first released rules for BitLicense in 2015, soon after proposing a regulatory framework in 2014.
The news comes after the NYDFS announced its plans to update the BitLicense’s terms for the first time in five years in mid-December 2019. The regulator will be accepting the general public comment on the proposed changes by Jan. 27, 2020. In July 2019, the regulator established a new department dedicated to licensing and regulating crypto-related businesses.