Ripple responds to Senator Toomey on XRP, the SEC, and how to do better

Rick Steves

Senator Toomey has recently said “China’s authoritarian crackdown on crypto, including Bitcoin, is a big opportunity for the U.S. It’s also a reminder of our huge structural advantage over China.”

Ripple Labs has responded to Senator Toomey, who asked for feedback on crypto and blockchain laws. Stuart Alderoty, Ripple’s General Counsel tweeted a summary of the firm’s answer in three bullet points:

  • encourage innovation sandboxes for crypto
  • increased public-private collaboration
  • engagement & consideration by the Senate of existing legislative efforts

“It all comes back to clear regulatory frameworks that allow innovation to flourish, with consumer and market protections. We don’t have clarity today in the US, despite those who insist on incorrectly suggesting otherwise. Thank you @SenToomey for engaging with the industry”, Mr. Alderoty added. 

Ripple’s full response, which can be found here, and first introduces Ripple, its products, and XRP, the native asset to the open-source XRP Ledger.

“Although Ripple utilizes XRP and the XRP Ledger in its product offerings, XRP is independent of Ripple. The XRP Ledger is decentralized, open-source, and operates on what is known as a “consensus” protocol. While there are well over a hundred known use cases for XRP and the XRP Ledger, Ripple leverages XRP for use in its product suite because of XRP’s suitability for cross-border payments.”

The document addressed to Senator Toomey then mentions SEC’s April 2019 guidance and how even SEC Commissioner Peirce criticized it, comparing it to a Jackson Pollock work insofar as it “splash[ed] lots of factors on the canvas without any clear message.”

Ripple praises SEC Commissioner Peirce’s sandbox proposal

The letter also reminds that SEC Chair Gary Gensler, while at MIT, stated the issue was deserving of a “worthy public debate” and for XRP and other “big market cap” tokens “there needs to be clarity in the market.”

Ripple welcomes Commissioner Peirce’s proposal of a “safe harbor” 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.

China’s crackdown on crypto is a “reminder of our huge structural advantage over China”, said Senator Toomey

The letter then focused on public-private collaboration as an essential element to achieving optimal outcomes instead of regulating innovation and job creation out of this country.

Senator Toomey is likely to agree with that since not only he is asking for feedback from blockchain companies but he has recently commented on China’s crackdown on Bitcoin.

“China’s authoritarian crackdown on crypto, including Bitcoin, is a big opportunity for the U.S. It’s also a reminder of our huge structural advantage over China.

“Beijing is so hostile to economic freedom they cannot even tolerate their people participating in what is arguably the most exciting innovation in finance in decades. Economic liberty leads to faster growth, and ultimately, a higher standard of living for all.”

Ripple calls Senate to consider two new proposed bills

Ripple’s letter then suggested the Senate consider the two new proposed bills: the Securities Clarity Act (SCA) and the Digital Commodity Exchange Act (DCEA).

“Both the SCA and DCEA seek to provide legal clarity to industry, markets and consumers in a way that an ad hoc, regulation by enforcement approach simply cannot.

“Moreover, these bills are an implicit acknowledgment that laws drafted for our legacy financial system cannot simply be overlaid on cryptocurrency and blockchain – rather, a tailored, flexible approach designed to address and remedy the specific challenges presented by this space is required. Ripple encourages the Senate to consider both the SCA and DCEA as they work to provide the certainty that is needed to keep industry within the United States while also maintaining the strong consumer and investor protections that have made American capital markets the best in the world”.

 

Read this next

Digital Assets

Celsius to repay +70% of custody account holders’ claims

A New York bankruptcy judge today approved a deal struck between troubled crypto lender Celsius Network and its “custody account holders” that will allow them to begin immediate withdrawals of 72.5% of their claims.

Retail FX

eToro revenue halves in 2022, valuation drops to $3.5 billion

Israeli social trading network eToro today reported financial results for the financial year ended December 31, 2022.

Uncategorized

Investors transfers $424 million out of bitcoin funds in six weeks

Despite bitcoin’s decent surge last week, which took the primary cryptocurrency up 70% from the year’s low, digital asset investment products saw outflows for the 6th consecutive week.

Digital Assets

OKX has $9 billion in ‘clean assets’, shows latest proof of reserves

OKX, formerly known as OKEx, has released its fifth proof-of-reserves report amid increasing demand of crypto investors asking for transparency from exchanges they trade with.

Digital Assets

Circle seeks France license to launch Euro stablecoin

Circle, the issuer of the second-largest stablecoin by market capitalization, is seeking to get a dual registration in France as it aims to on-shore its flagship product for the European market – EUROC – a reserve-backed stablecoin.

Digital Assets

CryptoWallet.com Among Minority of Successful Companies to Renew Coveted Estonian License

CryptoWallet.com has successfully renewed its virtual currency service license from Estonia’s FIU for the third year in a row, despite regulatory changes that have made it harder for virtual asset providers to meet the required standards.

Inside View, Institutional FX

Time for brokers to add options trading as volumes explode on high volatility

“Usually, adding options to the typical CFDs and equities offering leads to fragmentation of the platform technology as many brokers will need additional back-end and front-end components, and that could be an important barrier for them. Apart from that, legal hassle and costs associated with proper licensing of market data could be a barrier at first. We are seeing this trend among market data vendors and exchanges to make it easier and more affordable.”

Metaverse Gaming NFT

GCEX’s DeFi education and prime brokerage offering available in DubaiVerse

“We are excited to be part of the developments of The Sandbox and to join other top players in the region, including our regulator, Dubai’s Virtual Asset Regulatory Authority (VARA), as part of the DubaiVerse. This is a great opportunity to bridge the gap between Web3 early adopters and GCEX clients, building a community around Web3 and digital assets.”

Digital Assets

Circle wants Fed to back USDC stablecoin after “very serious stress test” with collapse of SVB

The collapse of Silicon Valley Bank allegedly proves Circle’s point that there is a need for its USDC stablecoin to be backed by the U.S. Federal Reserve with its U.S. dollars held at the Fed.

<