The New York Department of Financial Services (DFS) has tightened its noose on crypto assets, removing over a dozen well-known tokens such as Ripple’s XRP and meme coin Dogecoin from its “greenlist”.
Implications For XRP, DOGE
On Monday, New York’s Department of Financial Services (DFS), which oversees the conduct of firms dealing in digital assets, announced an update to its virtual currency oversight regime.
As part of the revamp, the agency dramatically altered the makeup of the list. From boasting 25 popular tokens, including Dogecoin, XRP, Bitcoin Cash, Chainlink, Ethereum Classic, Litecoin, Stellar Lumens, and Synthetix, the amended greenlist now consists of only 8 approved tokens.
After Monday’s redrafting, the updated greenlist now features just six stablecoins issued by DFS-registered entities plus Bitcoin and Ethereum. The absence of XRP and Dogecoin will undoubtedly affect how crypto businesses operate in New York. Businesses wishing to transact with non-greenlisted tokens must inform the DFS at least ten days before launching their services.
The DFS explained that it might consider adding a coin to its greenlist if “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 if “the coin is a stablecoin approved by DFS for issuance in New York by a VC Entity.”
Legal Expert Calls Decision To Remove XRP “Political”
XRP holders’ attorney John E. Deaton has termed the decision to remove XRP from its approved list of cryptocurrencies as “political and punitive in nature”.
Judge Analisa Torres of the U.S. District Court for the Southern District of New York in July ruled that programmatic sales of XRP to retail investors via exchanges did not qualify as securities.
Fellow lawyer Bill Morgan agreed with Deaton, highlighting that the DFS decision meant that a court verdict by a judge that a digital asset is not itself a security “has less weight for other US regulators than a speech of a senior SEC official about another crypto that the SEC itself disowned as expressing its official position.”