XRP News Today: Ripple Critiques U.S. Crypto Bill Over Vague Ancillary Assets Language and Regulatory Overlap

Ripple has voiced concerns over the U.S. Senate’s draft crypto bill, specifically highlighting the ambiguity in its language surrounding "ancillary assets." The company argues that the bill’s vague definitions could mistakenly classify decentralized tokens like XRP and Ethereum as securities, leading to regulatory confusion and potential overreach by the SEC [1]. Ripple emphasizes that tokens operating on public blockchains for more than five years should be exempt from such jurisdiction, reflecting their decentralized nature and maturity [1].

A core issue for Ripple is the lack of a clear regulatory boundary between the SEC and CFTC. Currently, the overlapping roles of these agencies create uncertainty for developers and builders in the crypto space. Ripple believes this ambiguity forces teams to allocate more resources to legal compliance than to innovation, ultimately stifling growth in the U.S. crypto ecosystem [1].

The company further argues that the bill’s broad interpretation of “ancillary assets” could lead to the SEC retroactively applying securities laws to tokens like Ethereum, which initially raised funds through an ICO. This, Ripple warns, would set a problematic precedent, especially for tokens that are now widely used in decentralized finance (DeFi) and smart contracts [1].

Ripple has proposed a regulatory framework that would exempt long-established tokens from SEC oversight while ensuring a clear division of labor between the SEC and CFTC. This, they claim, would allow for more predictable compliance and encourage innovation without unnecessary regulatory burdens [1].

According to the 2024 Electric Capital Developer Report, the U.S. share of global crypto developers has dropped from 38% in 2015 to just 19%, with Asia now leading at 32% [1]. Ripple attributes this decline, in part, to the current regulatory environment, which discourages talent from building and developing in the U.S. crypto space.

The firm’s concerns reflect a broader issue facing the industry: the need for a regulatory framework that supports, rather than hinders, innovation. As the debate around the draft bill continues, Ripple advocates for a balanced approach that fosters clarity and enables builders to focus on development rather than navigating a convoluted compliance landscape [1].

Source: [1] Ripple Raises Concerns Over U.S. Crypto Bill’s Vague Language and Its Impact on XRP and Innovation (https://en.coinotag.com/ripple-raises-concerns-over-u-s-crypto-bills-vague-language-and-its-impact-on-xrp-and-innovation/)