Despite the global crypto market showcasing a bullish trajectory, regulatory scrutiny could become an obstacle for the nascent industry. Earlier today, the New York Finance Watchdog implemented a new rule set to bill licensed crypto firms over supervisory costs.
This bill mainly targets New York crypto firms registered under the BitLicense. This requirement allows a company to conduct virtual currency business activities in New York or with a New York Resident.
Crypto Firms To Be Charged Over Supervisory Costs
According to an announcement, cryptocurrency companies registered under the New York state will start receiving bills over supervision fees. The fees collected from this regulation will allegedly help the regulator add “top talent” and additional resources.
The New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris noted:
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.
Notably, this new rule relating to assessment fees was initially proposed in December 2022. The NYDFS noted it had consulted industry stakeholders and conducted research before laying down this new rule. Harris says these assessment charges will “go a long way toward helping the space grow and helping make sure it grows safely.”
When you can work hand-in-hand with your regulator and your examiners, we can help identify issues early before they metastasize, and it really is a service that we can provide to the industry and it helps us as regulators better oversee the markets and protect consumers.
Furthermore, the new rule is said to be measured based on the formula of the particular crypto company size and complexity. In addition, the bill for the supervisory costs will be sent out to crypto firms five times across a financial year.
This includes four approximate quarterly supervisory adjustments based on the crypto company’s overall expenses for that particular year. It is worth noting this new rule aligns with traditional banks’ bills for assessment fees which the NYDFS eventually uses for its operations.
Crypto Firms Registers Under BitLicense
The BitLicense was introduced under the NYDFS regulatory regime in June 2015. This license requirement is somewhat similar to traditional banking supervision requirements.
Crypto firms are asked to fulfill specific requirements related to funding, safeguarding against cyber threats, and implementing measures to prevent money laundering, among other criteria.
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 maintained composure. Over the past 24 hours, the global crypto market capitalization has declined by only 1.8% at the time of writing, with a value above $1.3 trillion.
Featured image from Unsplash, Chart from TradingView