Leading Blockchain Payment Company Ripple Writes to SEC Emphasizing Its Position on Providing Regulatory Clarity for Cryptocurrencies
Last month, Hester Peirce, head of the SEC’s crypto committee, requested public comments to establish clearer crypto classification rules. Her demand for “some kind of exit” indicated a desire to end the regulatory confusion caused by previous SEC leadership.
Ripple’s Response
In its response, Ripple criticized the previous SEC leadership, particularly under Gary Gensler. The company emphasized that the SEC’s prior crypto guidelines were overly chaotic, prolonged, and unsupported by law.
Notably, it responded to the SEC’s previous thriving, which caused confusion among market participants, as it covered up its failure to faithfully adhere to the law.
Ripple Proposes 3 Solutions
Interestingly, Ripple put forward three recommendations to help the U.S. SEC address the chaos caused by the previous administration.
Return to the First Principle
To resolve this chaos, Ripple suggested that the SEC restore its first principle by only regulating securities as defined by federal securities laws.
The company proposed that many digital assets, especially those that do not generate yield or grant rights to profits, should not be classified as securities.
Maintain Statutory Scope
Additionally, Ripple urged the SEC to adhere to existing laws rather than create new ones that could cause further confusion.
The company pointed out that only the U.S. Congress has the final authority to legislate. Therefore, the SEC should leave the creation of new rules to Congress.
Need for Clarity
Moreover, Ripple emphasized that the SEC should provide regulatory clarity for the crypto market to bring relief. In this regard, the company praised the SEC’s Corporation Finance department for clarifying that meme coins are not securities. This clearly indicates that meme-based cryptocurrencies do not comply with U.S. federal securities laws.
Notably, Ripple suggested that the SEC should strive for this concise approach, believing it would end regulatory confusion in the cryptocurrency market.
At the same time, several crypto entities, including Ripple, are victims of this confusion. This has led the company to endure prolonged legal disputes with the SEC. The good news is that the litigation is nearing a conclusion, with the SEC deciding to drop its appeal against Ripple.
The remaining major issue is Ripple’s cross-appeal. Nevertheless, many legal experts expect that after the company reaches a favorable agreement with the SEC, it will drop the case.
