Ripple’s Push to Refine SEC Powers in US Digital Asset Bill

The evolving landscape of digital asset regulation in the United States is at a critical juncture, with industry leaders like Ripple Labs actively engaging lawmakers to shape future policy. The blockchain technology company recently submitted comprehensive feedback to the U.S. Senate, urging a re-evaluation of the proposed Responsible Financial Innovation Act of 2025. Ripple’s primary concern centers on provisions that, if enacted, could inadvertently lead to excessive oversight by the Securities and Exchange Commission (SEC) and exacerbate regulatory ambiguity, potentially stifling innovation within the burgeoning digital economy.

• Ripple Labs submitted comprehensive feedback to the U.S. Senate regarding the Responsible Financial Innovation Act of 2025.
• The company’s primary concern is potential excessive SEC oversight that could stifle digital asset innovation.
• On August 5, Ripple formally expressed reservations about the bill’s overly broad regulatory scope.
• A key point of contention is the bill’s vague definition of “secondary assets,” which Ripple fears could grant the SEC perpetual authority over established tokens.
• Ripple advocates for confining the SEC’s jurisdiction to initial investment contracts and for clearer definitions and time limits on the Howey Test’s application.

Addressing Regulatory Ambiguity in Digital Assets

On August 5, Ripple formally expressed its reservations regarding specific aspects of the bill, which is intended to modernize the supervisory framework for digital assets. The company argued that while the overarching goal of achieving regulatory clarity is commendable, the current draft risks imposing an overly broad and potentially indefinite regulatory burden on the digital asset market. This expansive scope, Ripple contends, could inadvertently hinder the very innovation it seeks to regulate.

The “Secondary Assets” Conundrum

A central point of contention in Ripple’s feedback is the bill’s treatment of “secondary assets.” Ripple contends that this vaguely defined term could grant the SEC perpetual authority over well-established and widely traded tokens, including prominent examples such as Ethereum (ETH), Solana (SOL), and XRP. This expanded authority, according to Ripple, would apply even when these assets are no longer directly associated with an initial securities offering. The company highlighted that such an approach would subject “long-established and widely traded tokens…to perpetual SEC oversight, even when current or future transactions have nothing to do with securities offering characteristics.” This concern underscores a fear that the SEC’s reach could extend far beyond its traditional purview, impacting secondary market activity rather than just initial capital formation.

Advocating for Clearer Boundaries and Innovation

To mitigate this perceived overreach, Ripple advocates for a more circumscribed role for the SEC. The company proposes that the commission’s jurisdiction should be confined strictly to transactions directly tied to initial investment contracts. Furthermore, Ripple urged Congress to explicitly define the application of the Howey Test—the legal standard used to determine if an asset qualifies as a security—and to implement clear time limits on the SEC’s oversight. “If Congress intends to codify the Howey Test,” Ripple stated, “it must do so in a manner that prevents abuse or manipulation by the SEC.” This emphasis on precise definitions and jurisdictional boundaries is crucial for fostering a predictable regulatory environment.

Ripple’s commentary underscores a broader industry appeal for balanced legislation. While acknowledging the imperative for a clear regulatory framework, the company warns that the existing draft could paradoxically introduce greater uncertainty rather than resolve it. This stance reflects a collective desire within the digital asset sector for policies that foster technological advancement and market growth without creating an environment of unbounded regulatory enforcement that could stifle innovation and competitiveness.