Crypto company Ripple Labs has officially submitted its feedback to the U.S. Senate Banking Committee, calling for more clarity in a proposed bill to regulate the crypto industry.
The response comes as part of a wider Request For Information (RFI) issued by the Committee after unveiling the Crypto Market Structure Bill—a draft legislation meant to bring order to the digital asset space.
Stuart Alderoty, Ripple’s Chief Legal Officer, announced the submission through a post on X (formerly Twitter). He thanked the Committee for inviting industry views. Alderoty said the blockchain company’s extensive experience working with global regulators and its tough legal battles, especially with the U.S. Securities and Exchange Commission ( SEC ), gave it a valuable perspective.
The executive expressed gratitude to the Senate Banking Committee for the opportunity to respond to its Request For Information. With over a decade of experience engaging with regulators globally and valuable lessons learned from its legal battle with the SEC, he said Ripple welcomed the chance to share its unique perspective.
While the RFI invited commentary on topics ranging from agency oversight and custody rules to illicit finance and innovation, Ripple’s response centered on the urgent need for regulatory clarity—particularly around the roles of the SEC and the Commodity Futures Trading Commission ( CFTC ) in crypto oversight.
Ripple warns of jurisdictional ambiguity
Ripple believes the draft bill does not clearly define the roles of the SEC and CFTC , and could make things more confusing. In its response, the company said the bill’s effort to separate responsibilities between the two agencies was vague and might lead to overlapping regulations. This would leave businesses and investors unsure which rules apply and who enforces them.
The blockchain company urged lawmakers to make clearer boundaries between the SEC and CFTC. Without well-defined roles, the crypto industry could continue to suffer from the same legal uncertainty that has held it back in the United States.
Ripple argued that this could lead to “perpetual SEC oversight” of major cryptocurrencies, even when no central authority controls the token. The firm proposed that the bill adopt language from the CLARITY Act, another legislative effort offering more structured guidelines for identifying digital assets as securities or commodities.
Ripple also suggested that tokens operating on permissionless, open-source networks for more than five years should be automatically excluded from being regulated as securities to reduce legal uncertainty.
Ripple urges Congress to prevent overreach
Ripple also warned that the proposed bill leaves too much room for future SEC leadership to interpret rules in ways that hurt the industry. The company referenced its long-running legal battle with the SEC over whether XRP is a security. Although a judge ruled partially in Ripple’s favor last year, the experience has left the firm wary of “regulation by enforcement”—where rules are made through lawsuits instead of legislation.
To prevent this from happening again, Ripple encouraged Congress to formally define legal tests like the Howey Test, which the SEC uses to decide if something is a security. Ripple said that if lawmakers want the Howey Test to apply to crypto, they should codify it carefully, ensuring it cannot be stretched to cover decentralized assets that do not fit the traditional mold of securities.
Ripple also raised the issue of state vs. federal regulation. It said federal law should take precedence—especially in market structure, stablecoin issuance, token classification, and custody standards—to prevent a patchwork of inconsistent rules across different states.
The company believes a unified national framework fosters innovation and encourages investment in U.S.-based crypto projects.
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