Ripple Warns Draft Bill Could Expand SEC Control Over Digital Tokens

Ripple has criticized a draft cryptocurrency market structure bill for potentially expanding the Securities and Exchange Commission’s (SEC) authority over digital tokens, warning that it could entrench unchecked regulatory power and create prolonged uncertainty for the industry. In a letter dated August 5, 2025, Ripple’s Chief Legal Officer, Stuart Alderoty, addressed Senate Banking Committee Chairman Tim Scott, arguing that the proposed legislation fails to provide the clarity it promises, particularly around SEC jurisdiction, token classification, and the treatment of long-established digital assets like XRP. Alderoty emphasized that the current definition of “ancillary asset” risks regulatory overreach by indefinitely placing future transactions of a token under SEC oversight if it was once offered as an investment contract [1].

The company argued that well-established tokens operating on open networks—such as ETH, SOL, and XRP—should not face perpetual SEC oversight when their current transactions no longer exhibit securities-like characteristics. Ripple expressed concern that the bill, if enacted, could redefine how tokens are classified and regulated, expanding the SEC’s oversight role into areas not traditionally under its jurisdiction [2]. This, the firm warned, could stifle innovation and deter investment in blockchain-based technologies.

Ripple’s public opposition to the bill reflects broader industry resistance to what is seen as a heavy-handed approach by the SEC, which has been increasingly aggressive in enforcing compliance across crypto platforms. The company’s stance aligns with its ongoing legal battles with the SEC, where it has consistently challenged the agency’s broad interpretation of securities laws. Ripple highlighted the potential for the bill to further complicate the legal landscape for token issuers and investors, adding layers of complexity to an already fragmented regulatory environment.

From a policy perspective, the draft bill is part of a broader effort by lawmakers to address gaps in the current market infrastructure and bring crypto assets under a more centralized and transparent regulatory framework. However, Ripple and other industry participants warn that the bill’s approach risks replicating the rigid regulatory models of traditional finance, which may not be well-suited for the decentralized and rapidly evolving crypto ecosystem. The firm advocates for a more balanced approach that supports innovation while maintaining regulatory clarity and investor safeguards.

The outcome of the legislative process will likely shape the trajectory of the crypto market for years to come. If the bill moves forward in its current form, it could increase compliance burdens for crypto firms, potentially driving innovation to less regulated jurisdictions. Conversely, if revised to address industry concerns, the legislation could foster a more stable and sustainable environment for digital assets, encouraging broader institutional participation and public confidence. Ripple’s response underscores the importance of ensuring that regulatory evolution keeps pace with technological progress, rather than constraining it.

Source:

[1] title: Ripple slams draft crypto market structure bill for expanding ...

url: https://cryptobriefing.com/crypto-market-regulation-ripple-response/

[2] title: Ripple slams draft crypto market structure bill for expanding ...