- Ripple urges lawmakers to clarify SEC and CFTC boundaries to reduce confusion in digital asset oversight.
- The firm opposes ancillary asset provisions, warning they could lead to unjustified and prolonged regulatory oversight.
- Ripple supports preempting state laws in areas like token classification and custody to ensure uniform national standards.
Ripple has officially responded to the Senate Banking Committee’s Request for Information (RFI) regarding the draft Crypto Market Structure Bill. Chief Legal Officer Stuart Alderoty stated the company welcomed the opportunity, emphasizing Ripple’s decade-long experience in global regulatory discussions, including ongoing interactions with the U.S. Securities and Exchange Commission.
The company addressed several key areas raised in the RFI, particularly those surrounding regulatory clarity and jurisdiction. Ripple expressed concern that the draft bill fails to clearly define oversight boundaries between the SEC and the Commodity Futures Trading Commission. The firm noted that this lack of clarity could contribute to greater confusion across the digital asset industry and called for more precise revisions to establish a balanced and coherent regulatory framework.
Ripple challenges the ancillary assets concept
In its response, Ripple questioned the use of the ancillary asset classification within the draft legislation. The company warned that such a framework could expose established tokens such as XRP, ETH, and SOL to extended SEC oversight, even in the absence of traditional securities features. Ripple emphasized that this approach could lead to inconsistent enforcement, depending on future SEC leadership.
To mitigate regulatory uncertainty, Ripple recommended that the bill follow the CLARITY Act’s classification framework for digital assets. The firm argued this would provide a more predictable standard, particularly for decentralized networks not controlled by any single entity. It also proposed that tokens active for at least five years on open, permissionless networks be excluded from securities classification.
Avoiding open-ended enforcement tactics
Drawing from its legal experience with the SEC, Ripple stressed the importance of preventing future enforcement-led approaches. The company called for Congress to clearly define how the Howey Test applies to digital assets, suggesting that open-ended language could allow for potential misuse. Ripple noted that such clarity is necessary to avoid prolonged legal battles and ensure fair industry practices.
Ripple concluded its response by supporting federal preemption over certain state laws. The company highlighted key areas such as market structure, custody standards, token classification, and stablecoin issuance as requiring national consistency to foster innovation and market stability.
