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- Ripple urges the SEC to replace enforcement actions with clear, lawful digital asset regulations.
- The company defends XRP by citing the Howey Test, stating most tokens do not qualify as securities.
- Ripple supports Safe Harbors and regulatory sandboxes to encourage crypto innovation under fair oversight.
Ripple has formally addressed the U.S. Securities and Exchange Commission (SEC) Crypto Task Force, calling for a structured and lawful approach to digital asset regulation. The letter directly sent to Commissioner Hester Peirce Ripple expresses objections about SEC regulatory practices while recommending the agency shift to formal regulatory policies instead of reactive enforcement measures.
Stuart Alderoty, Ripple’s Chief Legal Officer, published a post that condemned the SEC’s former leadership for causing regulatory confusion. According to his statements, a Bob Dylan lyric became one of his tools to express the frustration that cryptocurrency firms experience regarding regulatory confusion. The company explanation showed that SEC officials previously employed regulatory uncertainty to support their actions towards digital asset businesses.
Ripple demands that the SEC stop using security categorization unchecked for most cryptocurrencies since it exceeds its regulatory power. According to Ripple, the proper authority for defining digital asset market governance rests with Congress, not the SEC. Ripple demonstrated that the 1946 Howey Test must be followed as the legitimate security identifier while asserting that XRP tokens and others do not qualify as securities under this standard.
Ripple Pushes for Safe Harbor and Highlights Market Harm
The document explored extensive evidence of market consequences caused by past enforcement procedures. Ripple regarded the 2020 SEC lawsuit that triggered XRP price erosion exceeding 70 percent and a market valuation decline of $15 billion. Additional trading platforms chose to remove XRP, thus restricting U.S. investors from transacting with it.
Ripple compared their current situation and previous enforcement actions against Solana Cardano and Polygon. The company reported that actions taken against major exchanges by the SEC resulted in equivalent price depreciation, which negatively influenced market confidence and stability levels.
Ripple formally requested in its official communiqué to establish Safe Harbor policies as proposed by Commissioner Peirce. The proposed Safe Harbor policy would give blockchain projects an evolving period toward decentralization until they need to follow securities regulations. The company supported regulatory sandboxes in the UK, EU, and Singapore to combine oversight with innovation promotion capabilities.
Ripple pointed out that protocols that provide yield generation through staking services should not fall under securities legislation. Such decentralized mechanisms that grant returns independent of central authority cannot be considered investment contracts.
Additional statements from the company will address asset holding policies and other matters of regulation. Ripple maintains that legislative authority is the best way to create standardized rules for the cryptocurrency industry.
Also Read: Ripple CEO Hints at Possible Reduction in XRP Sales Amid Ongoing Criticism
