Crypto companies in New York have the option of obtaining a license called the BitLicense. Obtaining this license involves costs that amount to more than 100,000 dollars. This explains why in 2020, there were only 25 crypto companies holding BitLicense. These include Circle, Coinbase, Ripple and Square. Now, the New York Department of Financial Services (DFS) has decided to put in place a new regulatory framework. The new regulations mainly concern BitLicense holders.
The impact of new regulations on BitLicense holders
While US crypto regulation is not unanimous, the New York regulator publishes new rules. He presented the new regulations after changing the method of assessing BitLicense holder supervision costs. The new regulations give him full power to “collect supervision costs from licensed virtual currency companies“. It was set up under a provision of New York’s fiscal year 2023 budget. It indicates that crypto companies with the BitLicense will pay more taxes.
It turns out that BitLicense holders will be billed five times in the 2023-2024 financial year. Also, they will be subject to four quarterly reviews throughout the year. These will be carried out on the basis of the “estimated annual budget of the virtual currency unit at the time of billing“. Then another evaluation is planned, but it will take place at the end of the year. It will be carried out taking into account the actual expenses of the unit.
A new framework to better regulate crypto companies in New York
Additionally, the DFS Superintendent made comments in the press release announcing the new regulatory framework. Indeed, Adrienne Harris said : “This regulation provides the department with additional tools and resources to regulate the virtual asset industry now and in the future as innovators create new products and use cases for digital assets.“.
The DFS cited several requirements imposed on crypto businesses. In particular, the latter are required to comply with rigorous capitalization standards. They must do the same with regard to the protection of cybersecurity and the fight against money laundering. That said, the new DFS regulatory framework is comparable to that of banks and insurance companies. Also, the New York State regulator and other US regulators remain at war with the crypto industry.
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