New York Regulator Removes Ripple, Dogecoin, and Litecoin From Its Green List

On Monday, September 18, the New York Department of Financial Services (NYDFS) unveiled a major revision to its virtual currency framework that involves removing Ripple, Dogecoin, and Litecoin from the state’s “greenlist”.

Before the recent update, this list of approved tokens included 25 cryptocurrencies, featuring prominent names like Bitcoin, Ethereum, Dogecoin, Litecoin, XRP, and the emerging PayPal Dollar. However, following the recent overhaul, the list has been significantly reduced and now includes only eight tokens.

A spokesperson from the DFS explained these changes by stating that the list of greenlisted coins has been updated to align with the new general framework for greenlisted coins. In addition to this clarification, the department issued a press release outlining its intention to provide clarity on the protocols related to listing and delisting coins for regulated entities. This comprehensive revision also includes an increase in risk assessment standards for coin listing and enhanced requirements for businesses catering to the retail sector.

Superintendent Adrienne A. Harris' communication provides a more detailed understanding of the department's position. According to Harris's directive, "Virtual currency business entities... do not require prior approval from the New York State Department of Financial Services to list coins included on the Greenlist," unless otherwise specified by the department. However, these entities must notify DFS in advance and have an "approved coin-delisting policy" in place as a mandate.

In the letter, the New York regulator further added: 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 underscores that DFS retains full discretion over the contents of the greenlist, which includes the authority to make additions, removals, or any other modifications as deemed necessary.

Superintendent Harris' proactive approach in recent times has highlighted the department's increased oversight of cryptocurrencies. This commitment was exemplified by a significant $100 million settlement with Coinbase in January 2023, addressing deficiencies in the company's compliance infrastructure. Furthermore, in February of this year, DFS ordered Paxos to cease issuing Binance USD (BUSD).

Reactions to this updated framework have been diverse within the cryptocurrency community. Pro-XRP lawyer John E Deaton expressed skepticism, stating, "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 advocate Wrathof Kahneman provided clarification, saying, "Ripple did not lose a license in NY... XRP, the digital asset, was removed from the list today."