Ripple suggested SEC to regulate assets strictly within the securities definition, adhering to existing statutory laws, and providing greater clarity.
It criticized the previous SEC administration under Gary Gensler for creating confusion to mask its failure to uphold the law consistently.
Ripple Labs, the leading blockchain company has initiated a dialogue with the U.S. Securities and Exchange Commission (SEC) to introduce greater regulatory clarity for digital assets. The company’s suggestion comes to Hester Peirce, who’s leading the newly formed Crypto Task Force by the SEC, who demanded public input for clear crypto tax rules.
Crypto Mom Hester Peirce is willing to end the regulatory blockade created by the previous SEC administration under the leadership of Gary Gensler. Responding to this, Ripple slammed the Gary Gensler administration stating that it crypto administration was overly long, confusing, and not backed by any law.
Notably, it also highlighted that the previous SEC administration relied on creating confusion among market participants to mask its failure to consistently uphold the law.
Ripple Proposes Three Solutions
In order to end the regulatory roadblock, blockchain startup Ripple Labs has made three proposals to the U.S. SEC in order to end any further confusion.
Returns to the First Principle: In order to resolve this confusion, Ripple noted that the US SEC should return only to the first principle which means regulating only things that fall into the securities definition as defined by federal securities laws. The company argued that numerous digital assets, especially those that neither generate yield nor grant rights to profits, should not be categorized as securities.
Staying Within Statutory Bounds: Additionally, Ripple Labs also called the US SEC to stick to the existing laws instead of attempting to introduce new regulations that could lead to additional confusion. The company emphasized that the authority to create laws rests solely with the United States Congress, urging the SEC to defer rule-making to the legislative body.
Having Greater Regulatory Clarity: Ripple also demanded that the US SEC bring greater regulatory clarity to the crypto market while providing some relief to the industry participants. It asked SEC’s Corporation Finance Division to clarify that meme coins don’t classify as securities, while signaling that such cryptocurrencies fall outside the scope of U.S. federal securities laws. Furthermore, Ripple also urged the securities regulator to adopt this straightforward approach, asserting that it could effectively resolve the ongoing regulatory uncertainty in the crypto space.
As mentioned in our previous report, Ripple is working on a cross-appeal against the US SEC next month in mid-April, with the likelihood of a lawsuit settlement. Following the settlement, there’s a growing chance of having an XRP ETF and Ripple IPO launch by the end of 2025.
Changing Crypto Regulatory Landscape
Following the victory of Donald Trump in US Presidential Elections, the crypto regulatory landscape has been changing for the good as the Trump administration plans to bring several crypto-friendly policies in place. The SEC’s potential reversal of the Regulation ATS expansion may reduce compliance burdens on crypto exchanges and DeFi platforms, fostering greater innovation, as mentioned in our previous story.
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