NY Governor Wants Crypto Firms to Cover Costs for NYDFS Oversight

Published at: Jan. 9, 2020

Cryptocurrency entities licensed under the New York’s Financial Services Law (FSL) should pay the costs of regulatory oversight, Governor Andrew Cuomo believes.

The Democratic Governor purportedly wants the state authorities to amend the FSL in order to require virtual currency-related entities within the FSL jurisdiction to foot the bill for examination and oversight conducted by New York State Department of Financial Services (NYDFS).

The NYDFS is one of primary regulatory agencies for crypto-related businesses in New York state as the regulator issues a major business license for cryptocurrencies, the BitLicense. As the home of the financial capital of the United States, the NYDFS is often at the front line of new regulation.

Cuomo wants crypto businesses to pay for NYDFS oversight to “make progress happen”

Cuomo revealed his amendment proposal in his state of the state speech in New York on Jan. 8, where the Governor outlined his “Making Progress Happen” agenda. The crypto-related FSL amendment is part of Cuomo’s 2020 state of the state book, a 321-page list of policies suggested by the Governor to improve the economy of the state.

Specifically, Cuomo wants to put virtual currency businesses on an “an even footing with other financial services companies” that are required to pay assessments to the NYDFS to cover the costs of oversight. The document reads:

“Under current law, supervised entities that are licensed under the Insurance Law or Banking Law are required to pay assessments to DFS to cover the cost of examination and oversight. Entities licensed under the FSL (e.g. virtual currency entities) are not required to pay such assessments, despite being subject to similar examination and oversight requirements. The Governor proposes to amend the FSL to place such entities on an even footing with other financial services companies.”

Cointelegraph contacted the Governor's press office in order to get more clarity what virtual currency entities are particularly meant in this context. Cointelegraph has also requested some BitLicense bearers including crypto trading app Robinhood and financial firm SoFi to comment on the matter. This article will be updated pending any new information.

NYDFS to soon update its BitLicense for the first time in 5 years

The NYDFS, also referred to as the DFS, is a department of the New York state government that regulates financial services and products in such fields as insurance, banking and financial services. The authority first released rules for BitLicense in 2015, soon after proposing a regulatory framework in 2014.

The news comes after the NYDFS announced its plans to update the BitLicense’s terms for the first time in five years in mid-December 2019. The regulator will be accepting the general public comment on the proposed changes by Jan. 27, 2020. In July 2019, the regulator established a new department dedicated to licensing and regulating crypto-related businesses.

Tags
United States
Bitcoin Regulation
Cryptocurrencies
Government
New York
Finance
Nydfs
Andrew Cuomo
Bitlicense
Related Posts
Paxos seeks approval to become fully-regulated crypto bank
Stablecoin creator and crypto services provider Paxos filed an application to open a national bank on Wednesday. If approved, the pioneering Paxos General Trust will be headquartered in New York, licensed to hold cryptocurrencies and execute the duties of a regular trust bank. According to a blog post on the Paxos website, being granted a national trust bank charter from the U.S. government would broaden both the range of services offered by the company and the geographic area to which it can offer services: “Our mission is to modernize financial market infrastructure and enable the movement of any asset, any …
Regulation / Dec. 10, 2020
Report: Facebook Seeks BitLicense From New York State Regulator
Social media giant Facebook has applied for a cryptocurrency business license to use its announced virtual currency Libra in New York, according to a report by Reuters on June 28 New York requires a special license for crypto operations called the BitLicense, which is a product of the state’s finance regulator, the New York State Department of Financial Services (NYDFS). According to the report, Facebook has also been in contact with regulators in England and Switzerland, presumably to discuss the terms of Libra compliance. Facebook is reportedly aiming to launch Libra by 2020, and a spokesperson for the social media …
United States / July 1, 2019
Tagomi Holdings’ Subsidiary Gets BitLicense from New York DFS
The New York State Department of Financial Services (DFS) has granted a BitLicense to institutional-grade crypto trading platform Tagomi Trading, according to an official press release on March 27. Tagomi Trading, a subsidiary of Tagomi Holdings, is now legally authorized to trade virtual currency assets and to engage in money transmission. The company is allowed to offer trade routing and order execution services for non-security virtual currencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH), the statement notes. The firm’s parent company, Tagomi Holdings, was launched by PayPal co-founder Peter Thiel’s venture capital firm in December 2018. …
Adoption / March 27, 2019
New York State Legislature Proposes Creation of Cryptocurrency Task Force
The banks committee of the New York state legislature voted on Wednesday, May 30 to progress a bill that would create a digital currency task force. The task force would study the potential effects of the implementation of cryptocurrencies on financial markets in the state of New York. If passed, the bill would establish a group consisting of nine members which would be called on to submit a report to the governor, temporary president of the senate, and the speaker of the assembly by December of 2019. While preparing the report, the task force may reportedly consult with any organization, …
United States / June 2, 2018
Crypto Bahamas: Regulations enter critical stage as gov't shows interest
The crypto community and Wall Street converged last week in Nassau, Bahamas, to discuss the future of digital assets during SALT’s Crypto Bahamas conference. The SkyBridge Alternatives Conference (SALT) was also co-hosted this year by FTX, Sam Bankman-Fried’s cryptocurrency exchange. Anthony Scaramucci, founder of the hedge fund SkyBridge Capital, kicked off Crypto Bahamas with a press conference explaining that the goal behind the event was to merge the traditional financial world with the crypto community: “Crypto Bahamas combines the crypto native FTX audience with the SkyBridge asset management firm audience. We are bringing these two worlds together to create a …
Adoption / May 3, 2022