The State of New York has some of the best legislation in place for cryptocurrencies in the US. This all comes from New York’s Department of Financial Services (DFS). Every crypto firm that wants to do business in New York, must get a BitLicense.
Until now, that’s the only contribution crypto firms have made toward the DFS. Although the costs are ‘only’ $5,000, the actual costs are much higher. These can easily reach $100,000 if you take all costs into account. For example, lawyers and other related legal fees. Let’s take a look, at what is brewing now in the New York crypto legislation.
New York State Financial Year 2023 Budget
The 2023 $200 billion budget has been a surprise for New York crypto firms. Crypto firms are now supposed to contribute to their regulation. As a result, New York treats crypto firms the same way as banks and insurance firms. You would think this is a step-up for crypto firms, right? But is that indeed the case.
Source: dfs.ny
However, as with many things in life, it cuts two ways. For starters, let’s see what NYDFS Superintendent Adrienne Harris has to say. “At DFS, we can assess banks. We can assess insurance companies, and that’s how we fund this agency.” Furthermore, she stated that the FDS doesn’t want to use taxpayer money. Instead, each respective industry pays for its assessment. However, she also said, “We can’t yet assess virtual currency companies.”
Moreover, it is the taxpayers and the DFS who paid for the crypto industry assessment. Harris pledged to close this loophole. Well, this is how she managed to do exactly that. However, this new legislation won’t take effect for another two months.
Pros and Cons of the New Crypto Legislation
As with many real-life cases, people have their opinions ready. In this case, it’s important to look at both the pros and cons of this new crypto legislation.
However, before we do this, we like to point out that BitLicense is controversial. As already pointed out, costs to get a BitLicense are high. Furthermore, it is difficult to get accepted and meet requirements. More than one crypto firm left New York because of BitLicense. Here is a link to the DFS FAQ page. In case you have questions about BitLicense, this page has many answers.
Nonetheless, let’s get back to the pros and cons. On the pro side, we can add this:
- It brings better regulation.
- New York treats crypto firms equal to banks and insurance companies.
On the other side, the crypto industry prefers to see a better structured BitLicense. For example, a better or clearer application procedure. Furthermore, allow the trading of more coins in New York State. Once New York State manages to do that, crypto firms are more likely to pay this tax.
Special thank you to our esteemed roundtable speakers for providing their insights on the blockchain & digital assets ecosystem in NY:
🔹@NYDFS Superintendent Adrienne Harris
🔹Assemblywoman @SolagesNY
🔹Sr VP @NYCEDC @karenbhatia
🔹Assemblyman @clydevanel's LD Tyler Fritzhand pic.twitter.com/mS53FBkUvw— Global Blockchain Business Council (GBBC) (@GBBCouncil) April 13, 2022
Conclusion
It is good to see new crypto legislation in New York State. However, as with many things, it divides opinions. Many people argue that BitLicense needs an urgent upgrade. Once New York takes care of this, it is more likely to find support for this tax.
On the other hand, crypto firms get treated the same as a bank or insurance companies. With a pro-crypto mayor in NYC, Eric Adams, we can only hope for a more crypto-friendly approach.
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