One of the biggest ongoing discussions within the crypto industry is that of regulation as the industry is constantly trying to get proper regulations put in place that will guide its progress into the mainstream. Also, it should be considered that as cryptocurrency matures, there will inevitably be the need for more regulations surrounding the industry such as regarding tax, registration of crypto and blockchain companies and so on. One of the best examples of this is the bitlicense that is issued in the state of New York that firms who wish to trade in digital currency must acquire.
Now, according to New York Governor Andrew Cuomo, all crypto firms who are licensed under the New York’s Financial Services Law (FSL) should be paying for the cost of oversight.
The Cost of Oversight
The governor has stated that he wants the financial services law to be amended to require crypto-related entities which are under the jurisdiction to foot the bill of oversight and investigations carried out by the New York State Department of Financial Services (NYDFS).
The New York State Department of financial services is the entity that issues the bitlicense to crypto-related firms and because it is based in New York, which is the financial capital of the United States, it tends to set the tone for regulation in the financial sector across the country and inevitably across the globe.
This suggestion was made by the governor on January 8, 2020, during his state of the state speech and is also part of a 321-page book he has compiled of suggestions that would help benefit the economy of New York.
His rationale is that digital asset firms should be put on the same level as traditional firms who are required to foot the bill of the oversight carried out by the New York Department of financial services.
“Under current law, supervised entities that are licensed under the Insurance Law or Banking Law are required to pay assessments to DFS to cover the cost of examination and oversight. Entities licensed under the FSL (e.g. virtual currency entities) are not required to pay such assessments, despite being subject to similar examination and oversight requirements. The Governor proposes to amend the FSL to place such entities on an even footing with other financial services companies,” he said.