In a bold move, Ripple has officially responded to the SEC's inquiries on crypto regulation, arguing that the agency has overreached its legal boundaries. The response was issued on March 21 as an answer to Commissioner Hester Peirce's inquiry.
The Core Argument: SEC’s Authority Has Limits
Ripple reminds the SEC that its actions are bounded by congressional powers, referencing 'West Virginia v. EPA (2022)'. The company argues that the SEC cannot extend legal definitions to classify decentralized crypto assets as securities.
Staking Is Not a Security, Ripple Says
Ripple also defends staking and decentralized yield protocols, asserting that passive returns from public, decentralized networks should not be labeled as securities.
Support for Safe Harbor and Legislative Clarity
Ripple endorses Commissioner Peirce’s 'Safe Harbor 2.0' proposal, a framework giving crypto startups grace periods without immediate regulatory threats.
Ripple's submission serves not only as a rebuttal but also as a comprehensive plan for modernizing crypto regulation. Whether the SEC will consider these suggestions remains to be seen, but Ripple has solidified its role as a key advocate for rational and transparent oversight in the crypto industry.
