Ripple Calls for Clearer SEC-CFTC Boundaries in Senate Crypto Bill

Ripple has formally submitted its response to the U.S. Senate Banking Committee’s Request for Information (RFI) regarding the proposed Crypto Market Structure Bill [1]. The company emphasized the need for clearer jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to avoid regulatory overlap and legal confusion. Ripple’s submission, led by its Chief Legal Officer, highlights concerns that the draft bill lacks sufficient clarity on which agency should oversee different aspects of the digital asset market [1].

One of Ripple’s key arguments is that the bill, as drafted, could result in the SEC exerting control over open blockchain networks such as Ethereum, Solana, and XRP, even in cases where no securities are being traded. Ripple warned that this ambiguity could hinder innovation and fail to provide much-needed legal certainty for developers and market participants [1]. The firm also raised concerns about the use of the term “ancillary assets,” which it claims could lead to regulatory overreach and complicate compliance for open networks [1].

Ripple advocated for the adoption of the CLARITY Act’s asset classification framework, arguing that this approach would reduce regulatory fragmentation and provide a more coherent legal structure. It also proposed that long-standing tokens, especially those operating on open and permissionless networks, should be exempt from securities laws after a five-year threshold [1]. This would help prevent legacy tokens from being subject to retroactive enforcement by the SEC.

Another important point raised by Ripple is the application of the Howey Test to digital assets. While the firm did not oppose the use of the test in principle, it warned against broad language in the bill that could allow future SEC administrations to expand its application. Ripple urged Congress to be precise in defining when the test should apply, to prevent regulatory overreach and ensure consistent enforcement [1].

Additionally, Ripple expressed support for federal preemption in several key regulatory areas, including stablecoin issuance, custody standards, and market structure rules. It argued that allowing states to regulate these areas independently could create a patchwork of conflicting requirements and hinder the development of a cohesive national crypto market [1].

The company’s response was framed as a contribution to a more balanced and innovative-friendly regulatory environment. Drawing on its experience with global regulators and its ongoing litigation with the SEC, Ripple emphasized the importance of consistent and fair rule application in ensuring long-term market stability [1].

Source: [1] Ripple Seeks Revised Jurisdiction Terms in Senate Crypto Legislation (https://cryptonewsland.com/ripple-seeks-revised-jurisdiction-terms-in-senate-crypto-legislation/)