New York crypto firms will soon have to contribute to their regulation after the New York State Department of Financial Services was given new powers under a $ 220 billion budget.
Under the law signed as part of the state budget for the 2023 financial year, the New York Department of the Treasury (DFS) will charge cryptocurrency companies the same fees as banks and insurance companies.
A DFS announcement says the finances will go toward regulating and supporting the industry.
DFS did not disclose the amount the companies had to pay. Instead, it states that the company “shall be valued in proportions that the director deems fair and reasonable.” DFS calculates these shares using a formula co-developed with the company.
DFS superintendent Adrienne Harris explained the reasoning behind this new provision:
“At DFS, we have the ability to assess banks, we have the ability to assess insurance companies, and that’s how we fund this agency.”
We don’t take taxpayer money. We are paid for by assessments from the industry, and we don’t yet have the ability to assess virtual currency companies.
DFS superintendent Adrienne Harris explained the reasoning behind this new provision
New York-based crypto firms are already paying DFS. However, they only spent $5,000 on the original BitLicense application. BitLicense is a controversial certification that has been required by companies trading virtual currencies in New York since 2015.
Not only is it hard to come by, critics say, but it can also cost around $100,000 if we factor in legal fees and associated costs. To date, DFS and taxpayers have shouldered the financial burden of regular inspections and other costs.
“It’s putting the cart before the horse,” said Kleinman. It’s a little ridiculous that they’re even thinking about taxing when they haven’t even figured out a really good system for allowing companies to get the BitLicense.”
In an interview with Law360, attorney and board member for the New York Blockchain and Crypto Association, Randy Kleinman, said