Licensed Cryptocurrency Companies May Face Assessment Fees in New York

New York may soon require licensed crypto firms to pay assessment fees. The New York Senate passed by 2023 budget on 9 April, granting the New York Department of Financial Services (NYDFS) to charge additional fees from crypto companies.

'The expenses of every examination of the affairs of any person regulated pursuant to this chapter that engages in virtual currency business activity shall be borne and paid by the regulated person so examined, but the superintendent, with the approval of the comptroller, may in the superintendent’s discretion for good cause show remit such charges.'

source: NY 2023 Budget

Adrienne A. Harris, the new Superintendent of the NYDFS issued the following statement regarding cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term: "The budget includes a new authority to collect supervisory costs from licensed virtual currency businesses, like the Department already does for banking and insurance companies.

"New York was the first to start licensing and supervising virtual currency companies, and we continue to attract more licensees and the most crypto startup Startup A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c Read this Term funding of any state in the nation.

"This new authority will empower the Department to build staff with the capacity and expertise to best regulate and support this rapidly growing industry."

Official Source

New York was among the first to require crypto companies to be licensed ('BitLicense'). The fee of the BitLicense is currently $5,000. The new budget provisions are expected to come into effect in approximately 60 days.

How Much Is the New Assessment Fee?

The crypto assessment fee is undisclosed. However, the current fees for regulated financial firms are billed 5 times per annum.

Companies that accept cryptocurrencies as a payment method, create software that is related to cryptocurrencies (such as wallets) or advise on trading do not require a license or pay the new fee.

Excessive taxing has its risks. Crypto firms may choose to relocate outside of New York to avoid paying the assessment fees.