Ripple Urges SEC to Provide Regulatory Clarity for Crypto Market
Following a request from Hester Peirce, the head of the SEC’s Crypto Task Force, for public input on establishing clearer crypto taxonomy rules, Ripple has written to the SEC emphasizing the need for regulatory clarity in the cryptocurrency space. The company believes that clear regulations are essential to end the confusion caused by past SEC leadership.
Ripple’s Response to SEC’s Request
Ripple criticized the previous SEC leadership, particularly under Gary Gensler, for providing confusing and lengthy guidance that was not grounded in law. The company believes that the SEC’s past actions created confusion among market participants, masking the agency’s failure to adhere to the law.
Ripple’s Proposals for Regulatory Clarity
Ripple has proposed three solutions to help the SEC resolve the regulatory confusion in the crypto market.
1. Return to the First Principle
Ripple suggests that the SEC should regulate only assets that meet the definition of securities under federal securities laws. The company argues that digital assets that do not generate yield or confer profit rights should not be classified as securities.
2. Stay Within Statutory Bounds
Ripple urges the SEC to adhere to existing laws instead of creating new regulations that could further confuse the market. The company emphasizes that only the U.S. Congress has the authority to create laws, and the SEC should refrain from overstepping its boundaries.
3. Need for Clarity
Furthermore, Ripple stresses the importance of providing regulatory clarity for the crypto market. The company commends the SEC Corporation Finance Division for clarifying that meme coins are not securities, indicating that meme-based cryptocurrencies are not subject to federal securities laws. Ripple believes that a concise approach to regulation will help eliminate confusion in the market.
Despite facing legal challenges due to regulatory confusion, Ripple’s lawsuit with the SEC is nearing its conclusion. The SEC recently dropped its appeal against Ripple, with only Ripple’s cross-appeal remaining unresolved. Legal experts anticipate a favorable agreement between Ripple and the SEC, leading to the resolution of the case.