The cost of running a cryptocurrency business in New York is about to rise as the state government is preparing to require BitLicense holders to pay assessment fees to ensure compliance.
The rule was included in the New York State budget for fiscal year 2023 signed on April 9 by Governor Kathy Hochul, giving the state Department of Financial Services (DFS) “new authority to collect the costs of supervision of licensed virtual currency companies,” according to a DFS statement.
DFS Superintendent Adrienne Harris said that The fees will bring digital currency businesses in line with those already paid by institutions such as banks and insurance companies.and added:
“New York was the first state to start licensing and overseeing virtual currency companies, and we continue to attract more licensees and more cryptocurrency funding than any other state in the country.”
New York was the first state in the United States to require cryptocurrency companies to obtain a license with the introduction of the well-known “BitLicense”. Application fees for such a permit are currently $5,000 and are subject to vague capital requirements determined by the New York DFS.
The amount of the annual fee that the DFS will charge cryptocurrency companies is currently unknown.but the same fees for other regulated financial institutions can cost tens of thousands of dollars a year.
The DFS claims that the fees are to help pay for the operating expenses of regulating crypto businesses. and “will empower the Department to create staff with the skills and experience to better regulate and support this fast-growing industry.”
Businesses that accept cryptocurrencies as payment; they create software for the crypto space, such as self-custody wallets; o give advice on cryptocurrency trading; are not subject to the BitLicense and the corresponding new fees.
Recently, the regulation and licensing of cryptocurrencies in the state have come under fire.; billionaire investor Bill Ackman shared his thoughts in February on New York’s failed policies and how they might cause him to leave the state.
Ackman called on Mayor Eric Adams and Governor Hochul to address growing concerns around the regulation, saying that the easing of restrictions and the removal of regulatory barriers could make New York a “cryptocurrency innovation hub.”
Mayor Adams ran with plans to make New York City the “hub of the cryptocurrency industry”, and even received his first three salaries in bitcoin (BTC). Cointelegraph analysis in November shows that it is really up to the New York DFS and state government to enact changes that will appeal to the industry.
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