A proposal has been submitted by New York’s State Department of Financial Services (DFS) to include laws that would permit the agency to charge licensed crypto companies for regulating their activities.
The proposition looks bizarre, but the Financial Services Law (FSL) indicates that it is a general practice. Hence, the Department of Financial Services wants crypto companies to pay for its service in regulating them.
According to Adrienne Harris, the DFS superintendent who made the announcement via the agency’s website, public feedback on the proposal would last for ten days. The move by the DFS shows an intent to further include crypto-based businesses among the regulated financial firms in the state.
Currently, no provision in the FSL suits this purpose, even though crypto regulation was adopted in 2015. Harris’ comments show her support for the intended proposal.
She stated that the move of supervision, enforcement, and licensing would force crypto companies to adopt higher operational standards.
In addition, she explained the many benefits of the cost imposed on entities by the state financial regulator. Harris claimed that these charges would enable the DFS to continue guarding consumers and ensure the safety and effective running of the industry.
Also read:Structure Of The DFS Proposal
The DFS also explained how it plans to execute the proposal. Concerned companies would pay a fixed amount for the cost of overseeing licenses.
Also, they would pay a percentage of their earnings which the regulator considers suitable as overhead expenses and operational costs. This structure indicates that there isn’t a fixed amount for all companies, as each carries different oversight costs.
The state regulator added that the payment would be in five installments spread over a fiscal year. The crypto Market is experiencing another multi-billion loss due to the bankrupt exchange FTX.
Hence, it is unsurprising that law enforcement agencies are improvising new measures to impose extra oversight expenses. During a recent US Senate committee hearing on the FTX insolvency, Rostin Behnam, Community Futures Trading Commission (CFTC) chair, stated that the CFTC has the necessary tool to regulate the crypto space.
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