Ripple Calls for Balanced Crypto Regulation in Senate Bill Response

Ripple has submitted formal comments to the U.S. Senate Banking Committee in response to its Request for Information (RFI) on the proposed Crypto Market Structure Bill, advocating for a more defined and balanced regulatory framework for the digital asset industry [1]. The company emphasized the importance of clarifying the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Ripple expressed concern that the current draft fails to address these distinctions, potentially leading to regulatory confusion and inconsistency across the sector. It called for revisions that would establish a coherent and predictable oversight system [1].

A key area of concern for Ripple is the inclusion of the "ancillary asset" framework within the bill. The firm argued that this classification could extend unjustified and prolonged SEC oversight to well-established tokens such as XRP, ETH, and SOL, even in cases where traditional securities characteristics are not present. Ripple warned that such an approach could create regulatory uncertainty, with enforcement outcomes potentially influenced by changes in SEC leadership. The company advocated for a more objective and consistent approach to digital asset classification [1].

To address these concerns, Ripple proposed adopting the classification framework outlined in the CLARITY Act, which it believes would provide a clearer and more predictable regulatory standard. The company suggested that tokens operating on open, permissionless networks for at least five years should be excluded from securities classification, promoting innovation and ensuring fair treatment for decentralized networks. This stance aligns with Ripple’s long-standing engagement in global regulatory discussions and its experience in navigating U.S. regulatory frameworks, including ongoing interactions with the SEC [1].

Ripple also emphasized the need to avoid open-ended regulatory language that could be exploited for enforcement purposes. Drawing from its legal experiences with the SEC, the company urged Congress to clearly define how the Howey Test should apply to digital assets. It argued that ambiguous wording could lead to protracted legal disputes and hinder industry growth. Ripple stressed that regulatory clarity is essential not only for legal certainty but also for fostering a stable and fair market environment [1].

In addition to these recommendations, Ripple supported the idea of federal preemption over certain state-level regulations. The firm highlighted the need for a unified national standard in key areas such as market structure, custody, token classification, and stablecoin issuance. By promoting federal consistency, Ripple believes the bill can help prevent a patchwork of conflicting state laws and create a more supportive environment for innovation and market stability [1].

Ripple’s response underscores the broader industry demand for regulatory clarity in the rapidly evolving digital asset space. As the Senate continues to refine the Crypto Market Structure Bill, the firm’s input reflects a call for a balanced, forward-looking approach that respects both regulatory oversight and the unique characteristics of digital assets.

Source: [1] Ripple Urges Clearer Oversight in Senate’s Crypto Market Structure Bill (https://cryptofrontnews.com/ripple-urges-clearer-oversight-in-senates/)