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Financial Services Law Insights and Observations

NYDFS proposes virtual currency firms to pay supervision fees

Licensing State Issues Agency Rule-Making & Guidance Digital Assets New York NYDFS Virtual Currency Supervision

Recently, NYDFS announced it is seeking public comment on a proposed rule establishing how certain licensed virtual currency businesses would be assessed for the costs of their supervision and examination. According to NYDFS, the proposed regulation establishes a provision in the state budget granting NYDFS new authority to collect supervisory costs from virtual currency businesses that are licensed pursuant to the Financial Services Law, and will permit NYDFS “to continue adding top talent to its virtual currency regulatory team.” The proposed regulation states that it will apply only to licensed persons engaged in virtual currency business activity and that the fees will only cover the costs and expenses associated with NYDFS's oversight of each licensee. Specifically, the draft regulation states that a licensee's total annual assessment fee will be the “sum of its supervisory component and its regulatory component” and that each licensee will be billed five times per fiscal year. According to the regulation, there will be four quarterly fees, each approximately 25 percent of the anticipated annual amount, and a final fee based on the actual total operating cost for the fiscal year. Comments on the proposed regulation are due March 20.