In a notable development, the New York Department of Financial Services (NYDFS) has undertaken a substantial revision of its virtual currency framework, resulting in XRP, Dogecoin, Litecoin, among others being removed from the state’s “greenlist”. Late Monday’s announcement signified a pivotal alteration to the list that enumerates approved tokens for DFS-licensed firms.
Prior, this greenlist boasted 25 tokens, including heavyweight names such as Bitcoin, Ethereum, Dogecoin, Litecoin, XRP, and the emergent PayPal Dollar. However, post yesterday’s overhaul, the roster has been notably truncated, spotlighting only eight tokens. Remarkably Bitcoin (BTC) and Ethereum (ETH) are the only non-pegged coins, besides Gemini Dollar (GUSD), GMO JPY (GYEN), GMO USD (ZUSD), Pax Gold (PAXG), Pax Dollar (USDP), and PayPal Dollar (PYUSD).
Why It Means For XRP, Dogecoin And Litecoin
A DFS spokesperson elucidated the changes by stating, “The list of greenlisted coins has been updated to follow the new general framework for greenlisted coins.” Accompanying this disclosure, a press release from the department expounded on its intent to “clarify” the protocols associated with coin-listing and delisting for regulated entities. This sweeping revision also encompasses an escalation in risk assessment norms for coin-listing paradigms and enhanced stipulations for businesses serving the retail sector.
The correspondence from Superintendent Adrienne A. Harris offers deeper insights into the department’s stance. As outlined in the directive from Harris, “Unless otherwise informed by the New York State Department of Financial Services, virtual currency business entities … do not need the Department’s prior approval to list coins included on the Greenlist.” However, entities are mandated to inform DFS ahead of time and should have an “approved coin-delisting policy.”
Detailing further, the letter states: “DFS will consider adding a coin to the Greenlist if: 1) the coin or coin issuer has a demonstrated, historic record consistent with safety and soundness and the protection of customers, including broad marketplace adoption, or 2) the coin is a stablecoin approved by DFS for issuance in New York by a VC Entity.” The letter also emphasizes that DFS maintains comprehensive discretion over the greenlist’s contents, including additions, removals, or any other alterations.
Superintendent Harris’ proactive approach in recent times has underscored the department’s intensified cryptocurrency oversight. This commitment was highlighted with a substantial $100 million settlement with Coinbase in January 2023, addressing deficiencies in the latter’s compliance infrastructure. Furthermore, the DFS ordered Paxos to stop issuing Binance USD (BUSD) in February this year.
Reactions to this updated framework have been varied within the crypto space. Pro-XRP lawyer, John E Deaton, conveyed skepticism, remarking, “After it was determined NOT to be a security. It’s not even a security if Ripple sells it on exchanges. Yea, this move isn’t political or punitive in nature.” In contrast, XRP community stalwart, Wrathof Kahneman, offered clarity, stating, “Ripple did not lose a license in NY… XRP, the digital asset, was removed from the list today.”
At press time, XRP traded at $0.5092.
Featured image from Crystal Blockchain, chart from TradingView.com