Annual Assessment of Virtual Currency Businesses

Application Fees

Please refer to the Virtual Currency Business Licensing page for application instructions and fee information.

Billing

In accordance with Section 206 of the New York State Financial Services Law, persons regulated under the Banking and Insurance Laws shall be assessed by the superintendent for the operating expenses of the department. These operating expenses include regulation and supervision (including examination) of regulated entities. In April 2022, the New York State Legislature amended Section 206 to direct the Superintendent to assess entities regulated under the Financial Services Law that engage in “virtual currency business activity” in keeping with the assessment framework already in effect for entities regulated under the Banking and Insurance Laws. The adoption of 23 NYCRR Part 102 in April of 2023 established the process for how licensed virtual currency businesses would be assessed for costs of their supervision and examination.

The New York State fiscal year begins April 1 and ends March 31.

Assessment Calculation Charts

FY 2024-2025

• Quarter 1 (PDF)

FY 2023-2024

• Quarter 4 (PDF)
• Quarter 3 (PDF)
• Quarter 2 (PDF)

Billing Schedule

Each institution is billed five times for a fiscal year: four estimated quarterly assessments (approximately 25% of the annual amount) based on the Virtual Currency Unit’s estimated annual budget at the time of the billing, and a final assessment, or true-up, based on the Virtual Currency Unit’s actual expenses for the fiscal year. Any institution that is a Regulated Entity for any part of a quarter shall be assessed for the full quarter.

If an institution’s estimated quarterly payments exceed their final annual assessed amount, the overpayment shall be applied against the next estimated quarterly assessment, if less than or equal to such amount, with any excess refunded. If the quarterly estimated charges are less than the final annual assessed amount, the institution will be billed the difference.

First quarter billing is based on the Virtual Currency Unit’s annual budget. The second through fourth quarter bills are adjusted to reflect the best estimate of actual annual expenses during the course of the fiscal year, so that the final bill or refund is minimized.

Billing schedule is shown below. Payment is due 30 days from billing date.

Definitions

The following terms are defined in 23 NYCRR Part 102 for the purposes of calculating assessments for virtual currency businesses:

1. Hourly Rate means the average hourly salary and fringe benefit cost of the examiners and staff assigned to the supervision of Licensees plus a multiplier, as determined by the superintendent, representing a portion of the other operating overhead expenses of the Department.
2. Custody Basis means the measurement tool used to assess 50% of the Supervisory Hours, as defined below, among Licensees. The Custody Basis is based on the total United States Dollar value of virtual currency held on behalf of customers by each Licensee averaged over the prior four quarter-end balances reported. Depending on the total virtual currency custody average, the Custody Basis for each Licensee will be categorized by size as small, medium, or large, resulting in an allocation, respectively, of 5%, 15%, and 30% of 50% of the Supervisory Hours.
3. Custody Basis Assessment for an individual Licensee means the product of the Custody Basis Hours and the Hourly Rate.
4. Custody Basis Hours means the Custody Basis share of either 5%, 15%, or 30% of the total Supervisory Hours, divided by the total number of Licensees that have the same Custody Basis share.
5. Licensee means any person who is licensed pursuant to 23 NYCRR Part 200. The term Licensee shall only apply to the virtual currency business activities, as that term is defined in 23 NYCRR 200.2(q), of persons licensed pursuant to 23 NYCRR Part 200.
6. Person means an individual, partnership, corporation, association, joint stock association, trust, or other entity, however organized.
7. Regulatory Component represents the cost of examining licensees. For an individual Licensee means the Total Operating Cost, as defined below, less the Supervisory Component divided by the total number of Licensees.
8. Supervisory Component for an individual Licensee means the sum of its Transaction Volume Basis Assessment, as defined below, and its Custody Basis Assessment.
9. Supervisory Hours means the total number of hours worked by staff attributable to the ongoing supervision of Licensees, including the monitoring of Licensees, the processing of license or material business changes, and responding to inquiries.
10. Total Operating Cost means:
    1. the sum of the total operating expenses of the Department that are solely attributable to its oversight of Licensees; and
    2. the proportion deemed just and reasonable by the superintendent of the other operating overhead expenses of the Department which may be assessed against Licensees under FSL section 206(a).
11. Transaction Basis Hours means the Transaction Volume Basis, as defined below, share of either 5%, 15%, or 30% of the total Supervisory Hours, divided by the total number of Licensees that have the same Transaction Volume Basis share.
12. Transaction Volume Basis means the measurement tool used to allocate 50% of the Supervisory Hours among Licensees. The Transaction Volume Basis is based on the total number of virtual currency transactions by each Licensee in New York for the prior calendar year. Depending on the total number of virtual currency transactions, the Transaction Volume Basis for each Licensee will be categorized by size as small, medium, or large, resulting in an allocation, respectively, of 5%, 15%, and 30% of 50% of the Supervisory Hours.
13. Transaction Volume Basis Assessment for an individual Licensee means the product of the Transaction Basis Hours and the Hourly Rate.

Computations

Estimated Quarterly Bills – Each quarter, the first step is to compute the estimated annual amount.

The estimated annual amount is the sum of the Supervisory Component and the Regulatory Component. The Supervisory Component is computed by combining the Custody Basis Assessment and the Transaction Volume Basis Assessment.

The Basis Hours and Hourly Rate are established in January, prior to the first quarter (February 5) billing, and remain the same throughout the fiscal year.

The Regulatory Component is the total operating cost less the Supervisory Component divided equally among the licensees.

Once the estimated annual amount is determined, the quarterly bills are computed as follows:

• 1st Quarter = estimated annual amount divided by 4.
• 2nd Quarter = estimated annual amount, less the amount billed to date, divided by 3.
• 3rd Quarter = estimated annual amount, less the amount billed to date, divided by 2.
• 4th Quarter = estimated annual amount, less the amount billed to date.
• Final Assessment (true-up) = actual annual assessment amount less the estimated amount billed to date.

New Licensees are billed based on their Custody and/or Transaction Basis amounts in the prior year. They are not billed for activity prior to their license becoming effective.

Newly licensed entities in the fiscal year are only charged for the Regulatory Component

Billing Contact

Submit changes to the main point of contact for assessment billing matters to [email protected].

Payment Information

Payment Options: In addition to mailing a check, electronic payments may be initiated by the institution using the Department’s secure online portal DFS ePay. The steps to sign up for DFS ePay are provided below.

• Create or sign in to your Portal account.
• Use the “Ask for Apps” tab on the Portal home page and select “DFS ePay” from the list of apps
• In “Request Access” enter your company’s institution # and “Submit.”

Failure to Pay: Payment must be received by the due date. Failure to pay will result in additional penalties, interest and regulatory action described on the bill and accompanying letter.

Frequently Asked Questions

What is the “general assessment”?

The General Assessment is the mechanism for billing regulated industries to collect the operating funds of the New York State Department of Financial Services. The statutory authority for the General Assessment is derived from Section 206 of the New York State Financial Services Law.

General Assessment is billed in four quarterly estimated bills. Once the fiscal year is closed, a Final Assessment is computed. This generally occurs in December of the following fiscal year. At that time, the Final Assessment for each institution is calculated, estimated billings are subtracted, and the amount due the Department or credit due the institution is identified. Our goal is to make the estimated bills very close to the final assessment amount so there is a small amount due or refunded.

When do I pay?

The Department’s fiscal year runs from April 1 to March 31 and the General Assessment is billed in advance each quarter. Bills are mailed at least 30 days before the due date and are due for payment 30 days after the invoice date. Interest is added for late payment of an assessment. Bills deemed uncollectible are subject to collection by the Office of the New York State Attorney General, or, for some institutions, the Department will collect against the institution’s surety bond or pledged asset.

How do I pay?

Payment is accepted by check, money order, bank check, or through our secure online payment portal DFS ePay. Payments can be made either quarterly or pre-paid annually.

Where do I find the chart which shows how my bill is computed every quarter?

After every quarterly billing, a chart is posted on this page that shows how bills were computed It will show the number of institutions in each category and how the Department computed supervisory and regulatory amounts.

Why is my current assessment based on assets or volume from the previous year?

The assessment is based on the financial basis as of December 31 of the year prior to the start of the current fiscal year on file with the Department. This allows for a stable financial basis providing relative size information for all institutions within each industry and minimizes fluctuation in bills from quarter to quarter. For the first quarter bill, however, DFS uses the prior year’s basis for institutions that file an annual report and uses the basis as of September 30 of the previous year. For the second through fourth quarter and final assessment, DFS updates to the basis as of December 31 of the year prior to the start of the fiscal year. The December 31 data is the final basis for the full fiscal year.