New York, Monday, March 11, 2024 – The New York Department of Financial Services (NYDFS) has come under fire following the removal of XRP from its Greenlist.
This list specifies virtual currencies pre-approved for certain activities by licensed entities in the state. The move has spurred a prominent attorney, James Murphy, known as “MetaLawMan,” to consider legal action against the NYDFS. 1
Murphy’s frustration stems from the lack of transparency surrounding the decision. In January 2024, he filed a Freedom of Information Act (FOIA) request seeking clarification for the delisting of XRP, alongside Litecoin and Dogecoin. However, the NYDFS has not provided any official explanation.
The removal of XRP from the Greenlist significantly impacts companies licensed by the NYDFS. These firms, often referred to as BitLicense holders, can no longer offer services related to XRP without individual approval from the department, creating a cumbersome and time-consuming process.
This situation adds another layer of complexity to the ongoing legal battle between Ripple and the SEC. The SEC has accused Ripple of selling unregistered securities in the form of XRP. While the case is still ongoing, the NYDFS’s decision to delist XRP could be seen as siding with the SEC’s stance.
Murphy’s potential lawsuit against the NYDFS could centres on the lack of transparency in the delisting process. He might argue that the NYDFS’s decision unfairly restricts business activities and potentially infringes upon property rights.
The DFS Greenlist refers to a list maintained by the New York Department of Financial Services (DFS) that specifies virtual currencies and tokens pre-approved for certain activities by entities licensed by the DFS. These entities include firms with a “BitLicense” which allows them to engage in specific cryptocurrency-related businesses in New York State.
DFS Greenlist simplifies the process for licensed entities by pre-approving certain cryptocurrencies, allowing them to offer services related to those currencies without needing individual approval from the DFS.
The DFS also considers factors like a coin or token’s safety and soundness, consumer protection history, and broad marketplace adoption when deciding if it qualifies for the Greenlist.
Stablecoins issued by DFS-approved entities are automatically added.
In September 2023, the DFS significantly reduced the Greenlist, removing many popular cryptocurrencies like XRP, Dogecoin, and Litecoin. Now, it primarily consists of Bitcoin, Ethereum, and a few stablecoins.
NYDFS Publishes Proposed Guidance for Virtual Currency Listing and Greenlisted Coins. 2
- NYDFS: https://twitter.com/MetaLawMan/status/1764802796094734814[↩]
- tNYDFS: https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230918_guidance_vc_listing[↩]
