New York Codes, Rules and Regulations
Title 23 - FINANCIAL SERVICES
Chapter I - Regulations of the Superintendent of Financial Services
Part 102 - VIRTUAL CURRENCY LICENSEE ASSESSMENTS
Section 102.1 - Background

In 2015, the Department of Financial Services ("Department") adopted 23 NYCRR Part 200, which required persons engaged in virtual currency business activity, as defined in 23 NYCRR 200.2(q), to obtain a license, subject to certain exemptions, before engaging in such activity in New York. This licensing regime was created under the authority granted to the Department by the Financial Services Law ("FSL").

Generally, the Department's costs and expenses are charged to and paid by persons regulated by the Department. At the time that Part 200 was adopted, FSL section 206 provided that the costs and expenses of the Department would be respectively charged to and paid by the persons regulated by the Department pursuant to the Banking Law or the Insurance Law, with no provision made for the assessment of costs for persons regulated pursuant to the FSL. In 2022, the Laws of New York, Chapter 58, Part III, amended FSL Section 206 (a), as of June 30, 2022, to require the Department to assess the costs and expenses of regulating persons licensed pursuant to 23 NYCRR Part 200 ("Licensees"). FSL section 206 (a) now states: "ersons regulated under that engage in ~virtual currency business activity,' as that term is defined by the department, shall be assessed by the superintendent for the operating expenses of the department that are solely attributable to regulating such persons...."

To effectuate the authority granted by the recent amendment of the FSL, this regulation sets forth the basis for allocating the Department's costs and expenses among Licensees, and the process for making such assessments. This regulation only applies to Licensees, and the assessment only covers the costs and expenses associated with the Department's oversight of each person's virtual currency business activities. Accordingly, to the extent that a person is licensed to engage in virtual currency business activities under the FSL, and concurrently as a money transmitter pursuant to Article XIII-B of the Banking Law, such person will be billed separately for each license. To the extent that a person holds multiple licenses to engage in virtual currency business activities pursuant to 23 NYCRR Part 200, such person will be billed separately for each license. Persons who engage 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. To such an extent that a person holds both a limited purpose trust charter under the Banking Law and a license pursuant to 23 NYCRR Part 200, such person will be billed separately for each charter and license.