The concept for the change originated with Superintendent Adrienne Harris of the Department of Family and Social Services, who is now seeking public feedback on it. The regulatory body wants to get more oversight controls.
The state of New York’s Department of Financial Services (DFS) has proposed amending the state’s laws to grant it the right to tax authorized cryptocurrency businesses for the expense of regulating those enterprises.
You might find it strange, but the Department of Financial Services routinely taxes regulated non-crypto financial institutions for their operating expenses and administrative charges in accordance with the Financial Services Law (FSL).
The idea’s main proponent is DFS Superintendent Adrienne Harris. She made the announcement on the DFS website on December 1 and then invited feedback from the public over the course of 10 days.
Harris’s objective is to change the Financial Services Law to add a provision for crypto enterprises as it was not included when crypto regulation was initially enacted in New York in 2015. In essence, Harris wants to align virtual currency enterprises with traditional financial institutions that are subject to state regulation.
The laws will enable the Department to keep attracting exceptional talent for its virtual currency regulatory staff, according to Harris’s additional explanation.
The DFS will charge firms fees based on the total operational costs of overseeing licensees in addition to the “percentage determined appropriate and acceptable” for other operating and administrative costs, according to the plan’s supporting documentation.
Due to the fact that each organization is exposed to a different level of examination, there is no set amount that all companies must pay. The total amount payable, on the other hand, would be split up into five payments made throughout the course of the fiscal year.
Given that the cryptocurrency industry recently had yet another multi-billion dollar meltdown, this time due to the now-defunct FTX, Alameda Research, and former golden boy Sam Bankman-Fried, it should not be surprising that regulators are rushing to impose further regulatory supervision.