By
Godfrey Benjamin
March 22nd, 2024
Before now, New York’s Financial Services Law vividly lacked such provision that would seek to assess operating costs.
The New York Department of Financial Services, NYDFS, has floated a new regulation that seeks to assess the cost of its oversight duties. According to a Monday NYDFS statement, the rule will affect only the crypto firms that are licensed to operate within the state. That is those firms that have bagged the BitLicense. As of publication, only 22 companies have the license and are subject to the new regulation.
Under the new rule, NYDFS will assess such firms within its jurisdiction, for the cost of supervising them. The agency will then use this to add “top talent to its virtual currency team”.
In a statement, Superintendent Adrienne Harris expressed that it is expected that NYDFS’ new regulation will make the job of the regulator a lot easier. Harris said partly:
“This regulation provides the Department with additional tools and resources to regulate the virtual currency industry now and in the future.”
NYDFS Raises Requirements for Crypto Firms
Meanwhile, the new rule has undoubtedly raised the standard for crypto firms. According to NYDFS, companies will now have to pass rigorous capitalization checks. They will also be required to prove beyond reasonable doubt that they are secure and have good anti-money-laundering protocols in place. In line with the requirements, the regulator wrote:
“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.”
Recall that the NYDFS proposed adopting the new costing rule last December. At the time, New York’s Financial Services Law vividly lacked such a provision that would seek to assess operating costs. However, NYDFS has since met with major stakeholders and received feedback on the proposal, which is why it has now gone ahead to adopt the regulation.
It is also worth mentioning that the latest efforts are in line with the earlier plans of the New York state senate. About a year ago, the Senate promised to support NYDFS and ensure it gets all the help it needs to oversee the cryptocurrency sector. The idea is to bring its crypto oversight to the same level as its regulation of traditional banks and other financial institutions.