Ripple Advocates for Modernized Crypto Regulation
In a groundbreaking move for the cryptocurrency industry, Ripple has submitted a policy proposal to the U.S. Securities and Exchange Commission (SEC), arguing for a “promise-based” regulatory framework. This approach aims to distinguish between crypto tokens used for initial fundraising and their broader use in secondary markets, where securities laws would no longer apply.
Updating Securities Laws for the Evolving Crypto Space
The letter, officially submitted on January 9, outlines the need for regulation to align with the “lifespan of the obligation.” Ripple suggests that after an issuer’s initial fundraising obligations end, tokens like XRP should no longer be permanently classified as securities. Such flexibility is essential in mature markets where secondary buyers focus on liquidity, utility, and price discovery rather than initial promises by an issuer.
The “Zombie Promise” Problem in Crypto Markets
Ripple raises concerns about the persistent sustainability of what it terms the “zombie promise” problem. This dilemma arises when outdated legal obligations are extended indefinitely, even when secondary-market buyers do not rely on issuer guarantees. Ripple argues that such constraints are detrimental to innovation and the development of dynamic cryptocurrency markets.
Ripple’s Position Amidst Ongoing Legal Disputes
This regulatory submission comes amidst Ripple’s long-standing legal battle with the SEC over the classification of XRP. While the SEC initially contended that Ripple’s XRP sales constituted ongoing investment contracts, Ripple’s new framework emphasizes that such claims should expire once the issuer no longer maintains enforceable commitments to buyers.
A Shifting Regulatory Landscape for Crypto
Ripple’s arguments are timely, considering the rapid evolution of crypto-market regulations. The U.S. Congress recently passed the GENIUS Act, which sets new guidelines for stablecoins, and is working on comprehensive market-structure legislation slated for early 2026. Furthermore, the SEC has launched Project Crypto to transition from a contentious enforcement-heavy approach to a more structured rule-making process. With these seismic shifts, Ripple seeks to position XRP within a regulatory framework that balances innovation and investor protection.
Why It Matters for Crypto Enthusiasts
The outcome of Ripple’s submission may set a significant precedent for the broader cryptocurrency ecosystem. If successful, this initiative could provide clarity for other tokens navigating the blurry lines between securities and commodities regulation. It’s a potential game-changer for altcoins and stablecoins aiming for mainstream adoption beyond speculative trading.
Product Recommendation: Stay Updated with the Crypto Market
Keeping up with crypto regulation is essential for investors and traders. For tracking your tokens and portfolio performance, consider Ledger’s Hardware Wallet. It’s a secure and user-friendly option, offering seamless asset management while ensuring your investments are protected from cyber risks.
