NYDFS has passed regulations for virtual currency assessments, requiring BitLicense holders to pay fees five times per year.

The New York Department of Financial Services (NYDFS) has passed regulations for virtual currencies, granting the department new powers to collect regulatory fees from licensed virtual currency businesses. In the future, institutions holding a BitLicense will be required to pay fees five times a year and adhere to stricter regulations.

Entities Holding BitLicense to Face Stricter Regulations

New York is known for having the strictest cryptocurrency regulations in the United States, which not only apply to companies operating in New York but also extend to the financial activities of New York residents. In June 2015, the Department of Financial Services issued the Virtual Currency Regulation 23 NYCRR Part 200 under the New York Financial Services Law, which governs companies engaging in virtual currency business activities in the state of New York, requiring them to apply for:

• BitLicense: a specific operating license for virtual currency activities, currently held by companies such as Circle, Ripple, and Coinbase.
• Entities operating as limited purpose trust companies in the state of New York or New York banks approved to engage in virtual currency business under the New York Banking Law, including crypto-friendly banks like Signature and Silvergate.

The initial financial services law did not include provisions for assessing operational costs, unlike the requirements for licensed entities under the Banking Law. With the passage of the cryptocurrency assessment regulations, entities licensed as limited purpose trust companies or banking institutions will continue to be subject to assessments under existing laws and regulations. Holders of BitLicense will be required to pay fees five times a year and undergo quarterly assessments to estimate their operational costs and required fees.

The DFS's cryptocurrency regulatory framework mirrors comprehensive banking regulations, requiring companies to adhere to strict standards in capitalization, cybersecurity protection, and anti-money laundering protocols.

New York DFS Superintendent Adrienne A. Harris mentioned in a press release:

As the first regulatory agency in the United States to prudently oversee virtual currencies, New York has created a framework that sets the highest standards for safety, soundness, and consumer protection. As innovators create new products and use cases for digital assets, this regulation provides the department with additional tools and resources to oversee the current and future virtual currency industry.