Superintendent Adrienne Harris, from the Department of Family and Social Services, came up the idea. She is currently asking for opinions from the public. The regulator hopes to gain additional supervision.
The Department of Financial Services (DFS), New York State, has proposed a change to the statutes that would allow it to tax licensed cryptocurrency companies for the purpose of regulating them.
Although it may seem odd, it is a standard practice for Department of Financial Services to tax non-crypto financial organisations that are regulated. This is in order to maintain control and reduce costs.
Adrienne Harris, DFS Superintendent is the one behind this idea. On December 1, she made the announcement via the DFS website. Then, she submitted the document to the public for feedback over the following ten days.
The Financial Services Law didn’t include a provision that allowed crypto companies to be registered when it was first implemented in New York City in 2015. Harris is working on amending the law in order to include this provision. Harris is attempting to bring virtual currency-related businesses in line with other financial entities regulated in New York.
Harris further explained that the regulations will allow Harris to continue to hire outstanding talent for its virtual currency regulatory staff.
According to the plan’s paper, fees will be imposed by the DFS on businesses based upon the total operational expenditures of supervising licenees as well as the “proportion considered just and acceptable” for administrative and operating expenses.
This means that there is no one fixed amount that every business must pay as the company’s scrutiny is different. However, the total amount due would be divided into five installment periods spread over the duration of the fiscal year.
It shouldn’t be surprising that regulators are scrambling for additional oversight of cryptocurrency, considering that the sector has just witnessed another multi-billion dollar collapse, this time due to Alameda Research, FTX and former golden boy Sam Bankman Fried.