New York state financial regulators have considered new regulations for virtual currency businesses as the sector has fallen under scrutiny following the implosion of cryptocurrency exchange FTX.
The proposed regulation by the Department of Financial Services in New York would establish how licensed virtual currency businesses are assessed for costs of their supervision and examination. The move would activate a provision in the state budget that allows regulators to collect oversight costs from these businesses, similar to how other financial institutions in New York are covered.
New York was among the first states to regulate virtual currency businesses that deal in tokens or cryptocurrencies that exist only online.
“New York State has been regulating virtual currency companies since 2015 with a robust prudential framework. Through licensing, supervision and enforcement, we hold companies to the highest standards in the world. This assessment authority will allow the Department to continue building the team that is leading the nation with a suite of regulatory tools,” said Financial Services Superintendent Adrienne Harris. “The ability to collect supervisory costs will help the Department continue protecting consumers and ensuring the safety and soundness of this industry.”
Gov. Kathy Hochul last week put a two-year moratorium in place on proof-of-work cryptomining operations in New York amid a push by environmental organizations who have criticized the process for using a tremendous amount of energy. State officials will also be conducting an environmental review of proof-of-work cryptomining during the moratorium.