The NYDFS removes XRP alongside two dozen crypto assets from its token greenlist.
The New York Department of Financial Services (NYDFS) has updated its list of approved tokens for custody and listing.
DFS Removes XRP From Its Greenlist
According to a report yesterday by Fortune, the DFS removed over two dozen crypto assets from the list, with XRP included.
Aside from XRP, the DFS removed other top crypto assets from the green list, including DOGE and LTC. The regulator’s greenlist has been trimmed to support only eight crypto assets, including BTC, ETH, and PayPal Dollar.
The recent development is part of efforts made by the DFS to update its virtual currency and oversight regime for the crypto sector.
For context, the token greenlist was created by the DFS regulator for crypto supervision purposes. Previously, DFS license holders had the approval to list and custody tokens on the green list using a self-certification system.
Once two DFS license holders self-certify a token for listing or custody, the crypto asset would be automatically added to the green list. Although tokens could be added to the greenlist using the self-certification system, the DFS still supervised the process.
In its new guidance, the DFS said it has updated its token greenlist, trimming the list of approved tokens to only eight. Notably, XRP joined the list of crypto assets removed from the list.
The list now contains Bitcoin, Ethereum, and stablecoins.
XRP Enthusiasts React
Expectedly, the development stirred reactions from crypto community members, especially enthusiasts of XRP. Reacting, prominent XRP influencer Wrath of Kahneman took to the X platform to clarify that the recent development has nothing to do with Ripple.
Wrath of Kahneman, who first described the Fortune post as “petty” due to the headline, clarified that the development does not imply that Ripple or any of its entities have lost its license in New York.
He noted that the development indicates that NYDFS’ license holders may only custody digital assets on the green list. However, XRP was removed from the list, he said.
To clarify, #Ripple did not lose a license in NY, nor any Ripple entity. NY DFS license holders may only custody digital assets on the approved DFS list. #XRP, the digital asset, was removed from the list today. https://t.co/gqHcpaM2iT
— WrathofKahneman 🪝 (@WKahneman) September 19, 2023
It bears mentioning that Ripple holds a BitLicense from the DFS. The leading blockchain company became the second crypto startup to receive BitLicense approval in 2016.
Furthermore, Attorney John Deaton, a prominent crypto advocate and lawyer representing thousands of XRP holders in the SEC v. Ripple lawsuit, reacted sarcastically to the announcement.
“Yea, this move isn’t political or punitive in nature,” he said.
Attorney Deaton pointed out that the DFS removed XRP from its green list after the coin was determined not to be a security, adding that the coin is not also a security if Ripple Labs sells it on digital exchanges.
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. https://t.co/5DmIrqrXBc
— John E Deaton (@JohnEDeaton1) September 18, 2023
Recall that in July, the U.S. District Court for the Southern District of New York (SDNY) declared XRP itself as a non-security during the legal tussle between the SEC and Ripple Labs.
The court also found that programmatic sales of XRP on digital exchanges do not constitute securities. Interestingly, the ruling prompted several US-based exchanges, which once delisted XRP due to the SEC lawsuit, to relist the crypto asset.
While many expected XRP to see more positive regulatory developments, the DFS has axed the coin from its list of approved tokens for listing and custody.