Pushback on Ripple's Cryptocurrency Legislation Proposal: More Than Just Mere Commotion!
Ripple Criticizes U.S. Senate's Crypto Bill Over Vague Regulations
Ripple, a leading cryptocurrency company, has expressed opposition to the U.S. Senate's draft crypto bill, citing concerns about its vague and broad language regarding "ancillary assets." This ambiguity could potentially classify established cryptocurrencies like XRP and Ethereum as securities, subjecting them to overreaching SEC control.
The company's primary concern is that the concept of "ancillary assets" could unnecessarily extend securities laws to tokens and transactions that are not traditional securities. This includes decentralized tokens that have operated openly on public blockchains for years. Ripple argues that this risks retroactive application of securities regulations, which could disrupt decentralized finance (DeFi) and create legal uncertainty for mature tokens.
To address these concerns, Ripple proposes a regulatory framework that exempts mature tokens (operating over five years on open networks) from SEC oversight. This would clarify the distinct roles of the SEC and the Commodity Futures Trading Commission (CFTC) to prevent jurisdictional overlaps that currently hamper U.S. crypto innovation and lead to declining domestic market share.
The overlap between SEC and CFTC regulations has created uncertainty around compliance, clogged up capital flows, and slowed down innovation at the protocol layer. This regulatory deadlock is causing a measurable talent drain in the U.S. crypto industry, with the U.S. share of global crypto developers dropping from 38% in 2015 to just 19%, while Asia now leads with 32%.
This position reflects Ripple’s broader strategy to shape balanced and predictable U.S. crypto regulations amid ongoing litigation with the SEC. Ripple's long legal history and decentralized nature align with their proposal for XRP to be exempt from SEC jurisdiction.
The U.S. Senate drafted the crypto bill in 2025 and requested industry feedback. Ripple's response to the bill is considered strong but reasonable, as the company aims to protect innovation and avoid duplicative regulation that could stifle network growth and push builders offshore.
Despite Ethereum's current widespread use in DeFi and smart contracts, it could fall under SEC oversight under the current bill's language. This regulatory tug-of-war is bad for crypto builders, who are caught in a regulatory deadlock that is stalling network growth and pushing them to seek opportunities in more crypto-friendly jurisdictions.
In summary, Ripple's stance is critical of the bill’s vague ancillary asset language as overly broad, risking regulatory overreach by the SEC. The company's reason for opposition is that the ancillary asset concept could classify decentralized, non-security tokens as securities, causing legal uncertainty and harming innovation. Ripple's recommendation is for clear, stable regulatory definitions with exemptions for mature decentralized tokens, and a division of oversight responsibilities between federal agencies to protect innovation and avoid duplicative regulation.
- Ripple, a prominent cryptocurrency company, voices opposition to the U.S. Senate's crypto bill due to its unclear regulations surrounding "ancillary assets," which could potentially classify cryptocurrencies like XRP and Ethereum as securities.
- The company argues that this ambiguity could disrupt decentralized finance (DeFi), create legal uncertainty for mature tokens, and potentially cause retroactive application of securities regulations.
- Ripple proposes a regulatory framework that exempts mature tokens from SEC oversight, aiming to clarify roles between the SEC and the Commodity Futures Trading Commission (CFTC).
- Ethereum, widely used in DeFi and smart contracts, could potentially fall under SEC oversight under the bill's current language, which is concerning for crypto builders who may seek opportunities in more crypto-friendly jurisdictions.
- Ripple's stance is critical of the bill’s vagueness, arguing for clear, stable regulatory definitions with exemptions for mature decentralized tokens, and a division of oversight responsibilities between federal agencies to protect innovation and avoid duplicative regulation.
