Superintendent Adrienne Harris of the Department of Family and Social Services came up with the idea for the move and is currently soliciting the general public’s input on it. The regulator aims to gain additional supervisory controls.

The New York State Department of Financial Services (DFS) has suggested a change to the state’s statutes that would give it the authority to tax licensed cryptocurrency businesses for the cost of regulating those businesses.

It may seem strange to you, but according to the Financial Services Act (FSL), it is standard practice for the Department of Financial Services to tax regulated non-crypto financial organizations for cost and the costs of maintaining control over them.

DFS Superintendent Adrienne Harris is the driving force behind the idea. On December 1, she announced the move via the DFS website and then proceeded to present it to the public for comment over the next ten days.

When New York’s cryptocurrency regulation was first implemented in 2015, the Financial Services Act did not include a provision for cryptocurrency businesses, so Harris’ goal is to amend the law to include such a provision. In essence, Harris wants to align companies that operate virtual currencies with other financial entities that are regulated in the state.

Harris further explains that these “regulations will allow the Department to continue to hire outstanding talent for its virtual currency regulatory staff.”

The document related to the plan states that DFS will rate companies based on the full operating expenses of supervising licensees in addition to the “proportion judged fair and acceptable” for other operating and administrative expenses.

As a consequence of this, there is no predetermined amount that all companies must pay because the level of scrutiny to which each company is subject varies. On the other hand, the entire amount owed would be divided into five payment periods spread throughout the fiscal year.

It should come as no surprise that regulators are rushing to impose additional regulatory oversight, given that the cryptocurrency sector has recently witnessed another multi-billion dollar implosion, this time as a result of the now-defunct FTX, Alameda Research, and former golden boy Sam. Bankman-Fried.