On April 17, the NYDFS announced the adoption of final regulations intended to shift the cost of supervision and examination of BitLicensees from the NYDFS via the implementation of direct assessments to licensees. The new regulations will primarily only apply to those entities who hold a BitLicense, as entities engaging in virtual currency business activities as a limited purpose trust company or a banking organization will continue to be assessed under 23 NYCRR Part 101.
Under the new regulations, entities who conduct virtual currency activities will receive five assessments from the NYDFS throughout the course of the year, with the first four assessments occurring on a quarterly basis. These assessments will be tied to the anticipated sum of the NYDFS’ total operating expenses solely attributable to its oversight of Licensees, along with a portion of the NYDFS’ operating expenses. The final assessment will be a “true-up,” based upon the actual total operating cost. Once an assessment is issued, an entity will have 30 days in which to pay.
Lastly, the regulations give the NYDFS Superintendent the ability to issue special assessments in relation to a specific examination, investigation, or review, when it is determined that those costs are best allocated solely to the individual licensee. In making a determination regarding whether or not a special assessment is warranted, the Superintendent will look to factors including:
- The significance of the examination to the conduct of business by a given Licensee or group of Licensees;
- The potential seriousness of any violations of law or regulation identified by, or under review in, such examination or investigation; and
- The extent to which a Licensee attempted to cover up or failed to disclose the existence of such violations.
A copy of the final regulations can be found here.