New York Senate Authorizes NYDFS to 'Assess' Crypto Companies

The New York State Senate is boosting the Department of Financial Services’ (NYDFS) efforts to oversee the cryptocurrency sector.

The Senate passed its fiscal year 2023 budget early Saturday, which included a provision tasking NYDFS with developing a new “assessment” or charge for the cryptocurrency companies it oversees, to bring its oversight mandate in virtual currencies in line with how the regulator oversees more traditional banks and financial services firms.

The assessments are meant to “defray operating expenses,” according to the text of the budget reviewed by CoinDesk, and are only meant to cover expenses tied directly to the oversight of crypto companies.

“The expenses of every examination of the affairs of any person regulated pursuant to this chapter that engages in virtual currency business activity shall be borne and paid by the regulated person so examined, but the superintendent, with the approval of the comptroller, may in the superintendent's discretion for good cause shown remit such charges,” the text of the budget said.

NYDFS oversees the U.S.’s most developed cryptocurrency regulation through its virtual currency licensing regime, commonly known as the BitLicense. Companies hoping to offer New York residents access to cryptocurrency trading or wallet services must secure a BitLicense before they can set up shop.

In a statement, NYDFS Superintendent Adrienne Harris said the budget would “revitalize our state’s economy and create a stronger New York.”

“The budget includes a new authority to collect supervisory costs from licensed virtual currency businesses, like the Department already does for banking and insurance companies. New York was the first to start licensing and supervising virtual currency companies, and we continue to attract more licensees and the most crypto startup funding of any state in the nation. This new authority will empower the Department to build staff with the capacity and expertise to best regulate and support this rapidly growing industry,” she said.

The new budget provisions will take effect in two months.