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NY Financial Regulator Adopts Virtual Currency Assessment Rule
The regulation affects only companies with a state-issued BitLicense.
By Helene Braun
Updated Apr 17, 2023, 3:41 p.m. Published Apr 17, 2023, 3:17 p.m.
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The New York Department of Financial Services, or NYDFS, has adopted a new regulation for how crypto companies will be assessed for costs associated with their supervision.
The regulation will require companies to meet rigorous standards for capitalization, cybersecurity protection and anti-money-laundering protocols, NYDFS said in a statement Monday.
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“As the first prudential regulator of virtual currency in the nation, New York has created a framework that sets the highest standards for safety, soundness, and consumer protection while fostering responsible growth,” NYDFS Superintendent Adrienne Harris said. “This regulation provides the department with additional tools and resources to regulate the virtual currency industry now and in the future as innovators create new products and use cases for digital assets.”
Only companies with a state-issued BitLicense – a license granted by NYDFS that allows firms to business in New York – are subject to the regulation. Only 22 companies have that license.
About a year ago, the New York State Senate said that it would boost NYDFS' efforts to oversee the cryptocurrency sector in an attempt to match oversight over cryptocurrencies with how the regulator oversees more traditional banks and financial-services firms.
NYDFS first proposed the rule last December.
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What to know:
- The U.S. Senate's crypto market structure bill has been waylaid by a dispute over something that's not related to market structure: yield on stablecoins.
- The Digital Chamber is offering a response to a position paper circulated earlier this week by bankers who oppose stablecoin yield.
- The crypto group's own principles documents argues that certain rewards are needed on stablecoin acvitity, but that the industry doesn't need to pursue products that directly threaten bank deposits business.
