Ripple Pushes SEC for Clear Crypto Regulations, Suggests 3 Solutions

Highlights:

• Ripple urged the SEC to return to basics and regulate only legally defined securities.
• The company criticized the SEC for misapplying the Howey test to expand its authority.
• It commended the SEC’s stance on memecoins and highlighted the need for clear guidelines.

Ripple, a leading blockchain payments company, has reached out to U.S. the Securities and Exchange Commission (SEC), stressing the need for clear crypto regulations. ​In February, Hester Peirce, head of the SEC’s Crypto Task Force, issued a public request titled “There Must Be Some Way Out of Here,” seeking input on establishing clearer cryptocurrency taxonomy rules. 

In its response, Ripple criticized the SEC’s past leadership, especially under Gary Gensler. The company argued that previous crypto guidance was unclear, overly complex, and lacked legal backing. Ripple stated that the US SEC does not have authority over most digital assets under current laws. The company argued that expanding this authority without Congressional approval would exceed the agency’s legal limits.

Ripple also criticized the previous administration’s handling of the Howey test. The company argued that speculative trading and token value discussions were wrongly used to define investment contracts. It urged the US SEC to stop misapplying legal tests to assert control over non-securities transactions. The company claimed that the past SEC deliberately created confusion to hide its failure to follow the law properly.

Today, @Ripple submitted its response to Commissioner @HesterPeirce’s Feb. 21 statement: “There must be some way out of here,” calling for public input on crypto taxonomy rules.

That Dylan lyric continues: “There’s too much confusion, I can’t get no relief.” The prior…

— Stuart Alderoty (@s_alderoty) March 21, 2025

Plan to Fix SEC’s Regulatory Confusion

Ripple proposed that the SEC should return to the basics to eliminate confusion. It suggested that the agency should only regulate assets that are clearly defined as securities under federal laws. The company argued that many digital assets, especially those that don’t generate profits or yield, should not be classified as securities.

Ripple urged the SEC to follow existing laws and allow Congress to create new crypto regulations. The company stated that the SEC should prioritize fraud prevention using current laws. It said Congress should define market structures.

In a March 21 letter, Ripple stated:

“Congress is actively considering market structure and stablecoin legislation. It is the role of policymakers to establish new legal standards governing crypto assets.”

Ripple Urges SEC to Follow Laws, Let Congress Decide Crypto Rules

Furthermore, Ripple stressed the importance of the SEC providing regulatory clarity to support the crypto market. Ripple commended the SEC’s recent statement on memecoins as a model regulatory approach. It highlighted that the SEC’s position was clearly based on existing law. The statement confirmed that memecoins do not fall under federal securities laws or the SEC’s jurisdiction.

SEC Commissioner Hester Peirce also addressed this issue in a February interview with Bloomberg Crypto. She stated that many memecoins likely fall outside the SEC’s regulatory scope.

Ripple noted that many crypto firms have struggled due to unclear regulations. The company itself faced a long legal battle with the SEC. The lawsuit is now close to ending as the SEC has dropped its appeal. The only remaining issue is Ripple’s cross-appeal. Experts say Ripple may withdraw if it gets a good agreement.