NYDFS proposes charging crypto businesses for supervision

The New York State Department of Financial Services proposed new rules that would allow it to charge virtual currency businesses for the cost of oversight. 

The proposal announced Thursday would use new authority granted in the state's 2023 fiscal year budget that allows the department to gather supervisory fees from licensed virtual currency businesses. Charging virtual currency businesses for supervision would also allow the department to recruit top talent to its virtual currency regulatory team, it said.

Adrienne A. Harris, the superintendent of financial services, said the move is critical to ensuring consumer protection in the largely unregulated crypto market.

Christopher Goodney/Bloomberg

"The ability to collect supervisory costs will help the Department protect consumers and ensure the safety and soundness of this industry," Harris said in a press statement. 

Though similar regulatory tools already apply to many noncrypto businesses, the New York agency's actions raise new questions for the expanding crypto regulation framework.  Given increasing pressure on regulators to grapple with digital assets in the wake of the FTX collapse, regulators will continue to look to New York for emerging oversight tools.

The proposed regulation is subject to a 10-day pre-proposal comment period, followed by a 60-day comment period upon publication in the State Register.