The cost of running a crypto business in New York will rise as the state government prepares to require companies holding a BitLicense to pay assessment fees to ensure they are compliant.
The rule was included in New York State’s fiscal year 2023 budget, which was signed into law by Gov. Kathy Hochul on April 9 and gave the state’s Department of Financial Services (DFS) a “new authority to levy regulatory costs on licensed companies with virtual currency,” according to a statement from DFS.
DFS Superintendent Adrienne Harris said the fees would bring virtual currency deals in line with those already being paid by institutions such as banks and insurance companies, adding:
“New York was the first company to begin licensing and overseeing virtual currency businesses, and we continue to attract more licensees and the most crypto startup funding of any state in the nation.”
New York State was the first in the US to require crypto companies to be licensed with the launch of the now-known “BitLicense,” application fees for such a license are currently $5,000 and subject to vague capital requirements set by the New York DFS.
The amount of the annual assessment fee that DFS will charge crypto firms is currently unknown, but the same fees for other regulated financial institutions can cost tens of thousands of dollars a year.
DFS states that the fees are intended to pay for the operational costs of regulating crypto firms and will “empower the Department to build staff with the capacity and expertise to best regulate and support this fast-growing industry.”
Companies that accept crypto as a form of payment, create software for the crypto space such as self-custody wallets, or provide advice on crypto trading are not subject to the BitLicense and the corresponding new fees.
Related: Self-regulatory organizations growing alongside new US crypto regulation
Recently, crypto regulation and licensing in the state has come under fire as billionaire Bill Ackman shared his thoughts on New York’s failed policies and how he might exit the state in February.
Ackman appealed to Mayor Eric Adams and Gov. Hochul to address the growing concerns about regulation, saying relaxing restrictions and removing regulatory barriers could turn New York into a “cryptohub of innovation.”
Mayor Adams had plans to make New York City the “hub of the cryptocurrency industry” and even took his first three paychecks in Bitcoin (BTC). Analysis by Cointelegraph in November shows that it really is up to New York’s DFS and state government to enact changes that will lure the industry.
https://cointelegraph.com/news/bitlicensed-crypto-firms-ordered-to-pay-annual-assessment-fees-in-new-york BitLicensed Crypto Firms Ordered to Pay Annual Evaluation Fees in New York