- The New York Department of Financial Services (NYDFS) has removed XRP from its greenlist.
- WrathofKhaneman believes the removal would lead to an extra regulatory burden for XRP.
- The NYDFS greenlist accommodates coins VC entities can hold without seeking further approval.
The New York Department of Financial Services (NYDFS) has removed XRP from its greenlist, and crypto analyst ‘WrathofKhaneman’ on X (formerly Twitter) believes it would lead to an extra regulatory burden for the crypto token. WrathofKhaneman explained what the NYDFS greenlist is all about and the possible implications of the XRP removal for the crypto token and its users.
Notably, the NYDFS lists coins that Venture Capital entities can hold without seeking further approval available on its website. The coins that fall into that category are on the agency’s greenlist. Hence, companies holding the NY BitLicense have express permission to deal in such digital tokens.
WrathofKhaneman explained that holding a NY BitLicense allows VCs to engage in “virtual currency businesses” in New York. The license would allow VCs to buy, sell, or hold digital tokens; exchange virtual currencies for fiat or other digital tokens; provide brokerage or trading; operate an exchange; provide wallets; and issue digital tokens.
The analyst explained that the theory behind the NY BitLicense is that it protects the NY financial structure and warrants that the licensed virtual currencies have adequate capital and reserves, strong security, and robust AML/KYC procedures.
WrathofKhaneman noted that the recent removal affected all stablecoins, XRP, Dogecoin, and Litecoin. He clarified that delisting these tokens does not make them out of reach for companies willing to include them in their services. However, they would need further vetting and a separate DFS-approved coin listing to use them. Hence, XRP is not illegal in NY. It simply is not automatically available for companies willing to use it.
According to WrathofKhaneman, the main implication of XRP’s removal is adding an extra regulatory burden on companies wanting to use it. He also noted that it would generate a bad sentiment among users who may consider it to be a risky asset.
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