Ripple Labs has encouraged the US Senate to revise its proposed crypto legislation, warning that the current design is introducing more confusion than clarity.
The Blockchain company submitted its reaction on 5 August and tackles concern about the regulatory scope and vague definitions that can suppress that innovation in the digital assets space.
The comments can be found on the Senate call for feedback on the draft responsible Financial Innovation Act of 2025, which was released on July 22.
The bill is intended to modernize crypto supervision by expanding regulatory instruments, improving consumer protection and offering clearer classification rules for digital assets.
Ripple emphasize worries
One of Ripple’s most important concerns is the treatment by the bill of ‘additional assets’, a vague term that could place a lot of digital tokens under SEC jurisdiction.
The company warns that this could lead the future SEC leadership to interpret the regulations loosely, possibly to maintain the policy that undermines the growth of the crypto space.
According to the company:
“This approach would long established, wide-traded tokens that operate on open and permissionless networks, including ETH, SOL and XRP, subject to perpetual sec supervision, even when current or future transactions do not bear any of the characteristics of a supply of effects.”
Moreover, Ripple emphasized that assets that are linked to investment contracts in the past should not be constantly subject to SEC jurisdiction.
The company argues that the SEC authority must be limited to the specific transaction in question, not extended to future transactions of the active.
The company noted:
“The approach to the design offers a back door to claim jurisdiction on contemporary transactions based on behavior that is either not relevant to the transaction or excluded enforcement through fundamental legal protection.”
In view of this, Ripple suggested a fixed period for SEC jurisdiction about tokens that was initially sold as part of an investment contract.
The company also called on the congress to clarify the application of the Howey test, a standard that is used to determine whether an active is a security, so that it is consistently applied without leaving room for subjective interpretations that can destabilize the market.
It added:
“If the congress is planning to codify the Howey test, this should do this in a way that prevents abuse or manipulation by the SEC.”
Calls for legal clarity
In addition to concern about secrets, Ripple urged legislators to offer clear guidelines on which blockchain activities, such as deployment, mining and administration, should be regulated as effects.
The company argued that uncertainty about these activities could discourage innovation and prevent the broader acceptance of blockchain technologies.
It explained:
“To prevent the wrong application of the Howey test, it must be explicitly stated that ‘entrepreneurs or management efforts’ does not include core network functions or routine administrative services.”
In the meantime, Ripple also supported a provision in the bill that was aimed at protecting tokens that were actively traded for at least five years, which suggests that it could offer protection against retroactive effect.
The RLUSD emittent is of the opinion that this would offer more predictability and stability for established digital assets, while the industry would make confidence ahead.