In a March court record, Ripple accused the Securities and Exchange Commission (SEC) of “choosing a virtual currency.” Winners and losers. ” The hack came in response to a lawsuit filed by the regulator against a congested blockchain payment company in December 2020 alleging that XRP – the digital property developed by Ripple’s founders – was unlicensed security.
Before addiction, XRP It was worldly The third largest Cryptop – Behind Bitcoin and Ethereum. However, XRP It lost 60% of its value Including exchanges in the week following the SEC Coinbase Canceled. it is. In the meantime, Bitcoin and Ethereum, Ripple argued in its March presentation, remained exempt from the same SEC regulation.
By presenting his ideas Approach to crypto regulation On Tuesday, Ripple – unknowingly – may have laid out a landscape that will eventually leave the SEC, which supports other regulators, in its demise.
The main philosophical point Ripple received on Tuesday was that the current regulatory framework could be used to enforce crypto space.
Ripple wrote on its website on Tuesday: “We believe that our framework will provide the transparency required by innovators – and the right market protection for consumers – in conjunction with cryptocurrency for certain unique features.”
That contradicts one statement. Made by Coinbase last month In its own policy document, arguing that the framework exists, too many regulators try to extend their mandate to include crypto. Coinbase would rather create a new controller for digital assets.
“Laws designed to effectively control our financial systems in the 1930s did not reflect this technological revolution,” Coinbase wrote last month. “Forcing all digital assets to become integrated control categories before using computers could jeopardize the development of this technology.”
Ripple, for its part, introduced regulations such as the Digital Commodity Exchange Act, which aims to determine “digital commodity exchanges” and place them under the Commodity Futures Trading Commission (CFTC).
The company cited the importance of securities clarification law, which allows crypto products to be considered “investment contract assets” – thus separating them from securities. Such a move would help eliminate the SEC’s argument that certain crypto-related products – for example, interest-bearing accounts – are securities.
Ripple said in a statement: “The regulatory approach is intended to provide greater transparency to industry, markets and consumers,” Brad Garling House said in a statement.
That in itself may be the most subtle digging in the SEC. And Ripple isn’t the only crypto firm that sues the controller of that pattern.
“Dispute law should be the last resort for the SEC, not the first,” wrote Coinbase CEO Brad Armstrong. September Twitter, A day after the crypto exchange, the SEC revealed They threatened to sue. Loan if the company starts its interest-bearing product. Coinbase He stole the product Two weeks later.
The search for regulatory transparency – and the fact that the SEC is not offering it – may be one of the only common denominators in the Coinbase and Ripple philosophies. Of course, the two companies are not the only ones getting legal action from regulators.
SEC is reviewing BlockFi interest-generating products; Bloomberg reported WednesdayAlthough the supervisor has not done any harm to the company. The investigation comes more than three months from security officials in New Jersey, Texas and other states BlockFi ordered. To stop providing bills to residents because the products are not registered as collateral. BlockFi, On the website“He is in constant contact with the supervisors,” he said.
In September, Armstrong accused the SEC of “seizing land with other regulators,” while arguing that it was trying to fill a gap in regulatory gray space. Permitted and why, and instead መሳ Participate in intimidation tactics behind closed doors.
Ripple View includes other conditions, which suggest that controllers should be encouraged Creative sandbox – Another supervisor, the Consumer Financial Protection Bureau (CFPB). (SEC Commissioner Hesther Pears also said. Provides secure port rule In some cases, developers can launch products and build networks for a period of time without having to comply with federal security laws.)
Ripple also emphasizes the value of public-private partnerships – similar to the framework for overcoming innovation barriers. And here, Ripple does not completely cut the SEC. The bill calls for the establishment of a working group comprising of appointees from the SEC, the CFTC and representatives of Fintech, financial institutions and small businesses.
“An effective policy framework for crypto currencies can only be developed if there is clear communication and cooperation between private and public actors,” said Susan Friedman, head of Ripple Public Policy. “These discussions have helped shape the perception that the industry needs regulatory transparency and a broader ecosystem from regulators, as well as the requirements that regulators should require from the industry.”