Ripple brings fight to lawmakers to put an end to “SEC hostility”
It is no secret that Ripple has chosen to take on the SEC in a fierce legal battle rather settle with the agency like many others have before them.
The sense that the outcome of the SEC v. Ripple could dictate in part the future of digital asset regulation and enforcement increases every day.
It is no secret that Ripple has chosen to take on the SEC in a fierce legal battle rather settle with the agency like many others have before them.
Ripple Labs and its co-defendants, Chris Larsen and Brad Garlinghouse, might have taken the hard way out but they are on a mission to shape the digital asset space, which includes attempting to limit the SEC’s role in cryptocurrency enforcement.
Stuart Alderoty, Ripple’s general counsel, said in an interview that “the SEC’s approach under the current administration has been hostile” and it is “doubling down on regulation by enforcement” instead of providing clarity.
The legal expert added that Ripple is “uniquely situated to lead this discussion” regarding the digital asset framework in the United States. “This is not a case only about Ripple. We are fighting on behalf of the industry.”
A real approach to cryptocurrency regulation
Ripple has released a paper that calls on regulators, lawmakers and the industry to come up with a framework for the ecosystem.
“Cryptocurrency and blockchain technology need clear regulatory and licensing frameworks designed to address and remedy the specific challenges to our industry. All of the proposed measures discussed in this framework aim to provide legal clarity to industry, markets, and consumers in a way that a regulation-by-enforcement approach simply cannot,” said Ripple CEO Brad Garlinghouse.
Ripple mentions the Securities Clarity Act (SCA), which proposes a new term — “investment contract asset” — and makes clear that such assets should be considered separate and distinct from any securities offerings they may have been a part of.
The Digital Commodity Exchange Act (DCEA), which is complementary to the SCA, seeks to create a federal definition of “digital commodity exchanges” and charges the CFTC with authority to register and oversee them, similar to the requirements in commodity derivatives markets.
The blockchain specialist is also backing SEC Commissioner Hester Peirce’s sandbox idea, under which network developers would be exempt for three years from the registration provisions of federal securities laws, during which time they would be allowed to launch their products and develop their networks through token transactions.
If “network maturity” has been achieved at the conclusion of the three-year period, token transactions would not trigger securities registration requirements, under SEC Peirce’s proposal.
“The current uncertainty in the U.S. regulatory landscape discourages innovation and could cause a “brain drain” in the cryptocurrency and blockchain space. In order to incentivize innovation and inform the development of a clear and consistent regulatory framework for cryptocurrencies, we believe innovation sandboxes should be encouraged.”.
The abovementioned brain drain is increasingly possible as blockchain has gained momentum all over the world and many countries are taking measures to promote the development of their digital asset ecosystems.
Last week, Binance announced it is injecting €100 million in an R&D blockchain project in France.
