- NYDFS is empowered to collect supervisory fees from licensed cryptocurrency firms.
- Guidelines ensure legal compliance and high standards of security for firms.
- NYDFS only permits digital asset firms with a BitLicense to operate.
The New York State Department of Financial Services (NYDFS) has implemented a new regulation. That empowers the government agency to collect supervisory fees from licensed cryptocurrency firms operating within the state. This means that the agency now has the authority to obtain the necessary funds to oversee and regulate the activities of these firms.
#ICYMI: DFS Superintendent Adrienne A. Harris Announces Adoption of Virtual Currency Assessment Regulation: https://t.co/6W5ShsYjEx pic.twitter.com/xcevSyw2O9
— NYDFS (@NYDFS) April 17, 2023
Cryptocurrency companies operating within the state must comply with specific guidelines. This is to improve their capitalization and cybersecurity and prevent money laundering under existing state regulations.
The guidelines are designed to ensure that these companies operate within the legal framework provided by the state. And also maintain high financial and technological security standards.
By following the guidelines, these companies can enhance their capitalization, leading to increased investment and business growth. Additionally, implementing strong cybersecurity measures will safeguard against cyber threats and protect sensitive user data. This is especially important in the cryptocurrency industry, where the value of digital assets can be substantial.
Reports indicate that the NYDFS only allows digital asset firms with a BitLicense to operate within the state and are subject to regulation. Currently, only 22 cryptocurrency firms possess this license.
Financial Institutions to Assess Operating Costs
Regulators issued these guidelines in response to the absence of a provision for evaluating operating costs in the Financial Services Law of the state. The guidelines aim to establish a framework for assessing financial institutions’ operating costs. And to ensure that they are reasonable and justifiable. By doing so, the regulators aim to promote transparency and accountability in the financial services industry, ultimately benefiting consumers and the broader economy.
In February, 33 cryptocurrency and blockchain businesses that operate in New York with a virtual currency license, limited purpose trust charter, or money transmitter license provided feedback to the NYDFS. The NYDFS listened to the opinions and suggestions of these businesses, which are an essential part of the state’s financial services industry.
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