Leading blockchain payments company Ripple has written to the SEC emphasizing its stance on providing regulatory clarity for crypto.
Last month, Hester Peirce, the head of the SEC’s Crypto Task Force, requested public input on establishing clearer crypto taxonomy rules. Her request, titled “There must be some way out of here” suggests a desire to end the regulatory confusion created by the past SEC leadership.
Ripple Responds
In its response, Ripple criticized the past SEC leadership, particularly the one headed by Gary Gensler. The company emphasized that the SEC’s previous crypto guidance was overly confusing, long, and not backed by the law.
Notably, it echoed that the past SEC thrived on creating confusion for market participants to cover its failure to faithfully follow the law.
Ripple Proposes 3 Solutions
Interestingly, Ripple made three proposals to help the U.S. SEC resolve the confusion created by the previous administration.
Return to the First Principle
To resolve this confusion, Ripple recommended that the SEC should return to its first principle by regulating only what constitutes securities as defined by federal securities laws.
The company suggested that many digital assets, particularly those that do not generate yield or confer rights to profits, should not be classified as securities.
Stay Within Statutory Bounds
In addition, Ripple urged the SEC to follow the current law instead of establishing new ones that might create further confusion.
The company pointed out that only the United States Congress has the ultimate power to create laws. Hence, the SEC should leave the creation of new rules to the U.S. Congress.
Need for Clarity
Furthermore, Ripple emphasized that the SEC should bring relief by providing regulatory clarity for the crypto market. In this view, the company praised the SEC Corporation Finance Division for clarifying that meme coins are not securities. This clearly suggests that meme-based cryptocurrencies are not subject to U.S. federal securities laws.
Notably, Ripple recommended that the SEC should strive for this concise approach, which it believes will end the regulatory confusion in the crypto market.
Meanwhile, several crypto entities, including Ripple, have been victims of this confusion. This saw the company endure a protracted legal tussle against the SEC. The good news is that the lawsuit is close to its end following the SEC’s decision to drop its appeal against Ripple.
One major issue left is Ripple’s own cross-appeal. Nonetheless, many legal experts expect the company to drop the case once it reaches a favorable agreement with the SEC.
