Enterprise blockchain company Ripple has responded to a request for information from the U.S. Senate Committee on Banking, Housing, and Urban Affairs, which is led by Senator Tim Scott, regarding the digital asset market structure.
Ripple claims that it supports the effort to establish a clear regulatory framework for digital assets.
That said, the company has criticized the recently released draft market structure bill for creating more ambiguity instead of bringing much-needed regulatory clarity.
The company has noted that the bill gives the SEC too much power since it could regulate the majority of tokens as traditional securities. This includes tokens that do not usually fall under the agency's domain.
Ripple has called for additional revisions that would address these concerns.
"Perpetual" SEC oversight
Ripple has also argued that the definition of the "ancillary asset," which was proposed in the legislation, could perpetually subject various tokens, including XRP, to SEC oversight simply because they were once associated with an investment contract during initial sales, despite current or future transactions not being security offerings.
The recently proposed draft does not contain a mechanism that could put an end to SEC oversight of such tokens. Such uncertainty could potentially stifle development.
A "grandfathering" exemption
Ripple is also advocating for excluding the tokens that have been widely traded for a long period of time from securities regulations.
"Once a robust, liquid market has formed, it should not be disrupted by retroactive or ongoing government intervention," Ripple said.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team