Last January, Adrienne A. Harris was confirmed as Superintendent of the New York Department of Financial Services, which administers New York’s BitLicense program, among other things. In a March 28 interview, Harris discussed the BitLicense program in detail and addressed some of its long-standing issues, including slow response times to applicants and updating some of the program’s outdated regulatory and operational aspects.
Harris acknowledged the program’s significant delays in evaluating and evaluating new BitLicense applications. Addressing the program’s response time, Harris said, “We’re kind of building this desktop. We have already hired a number of people and we still have a lot to do, but my goal is to streamline this application process, but, again, without sacrificing the regulatory rigor that we need.
Harris discussed some changes that have already been implemented since taking the job, including adding a section to the BitLicense FAQs specifically addressing the application process and clarifying the timing of application reviews. Harris also outlined some of his plans to improve the BitLicense program in the future, including hiring thought leaders, engaging with artificial intelligence and machine learning in financial services, leveraging innovation to fill gaps in the financial system to serve underserved and marginalized people, and increase engagement. with federal virtual currency regulators and enforcers.
In the wake of Harris’ comments on April 9, the New York State Senate past their 2023 budget, which included a provision directing the New York Department of Financial Services to develop a new “assessment” for Bitlicensees to cover the cost of overseeing them, similar to what the Department is already doing for other regulated institutions , to bring its mandate oversight of virtual currencies in line with how the Department oversees more traditional banks and financial services firms. As a result, current and future Bitlicense licensees will likely be required to pay an annual monitoring assessment fee in addition to the one-time $5,000 Bitlicense fee. Although new BitLicense fees have not been announced, these assessments can range from $15,000 to over $80,000 for other institutions, depending on the size and type of institution.
In response to the budget’s passage, Harris praised the Department’s “new authority to collect oversight costs from licensed virtual currency businesses, as the Department already does for banks and insurance companies.” [. . .] This new authority will enable the ministry to build staff with the capacity and expertise to best regulate and support this rapidly growing industry.
put into practice: Hopefully future Bitlicense applicants can see some relief from the lengthy application process. But licensees shouldn’t be surprised if it comes to the increased cost of annual monitoring assessments.
Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 118