Ripple advocated for regulators' use of existing frameworks for the regulation of cryptocurrencies. In a policy proposal, Ripple's Head of Public Policy Susan Friedman underscored the firm's view that "clear communication and collaboration" between regulators and the private sector are essential for the creation of an effective crypto regulatory framework.

Ms. Friedman stated that Ripple supports the following existing policy proposals:

  • H.R. 1602 - the Eliminate Barriers to Innovation Act of 2021, as it would require the creation of a "collaborative working group" of appointees from the SEC, CFTC, FinTech and financial firms and small businesses.

  • H.R. 4451 - the Securities Clarity Act, as it would address the regulatory ambiguities associated with the SEC's interpretation of SEC vs. W. J. Howey Co. by, among other things, establishing a new asset type, the "investment contract asset," to clarify that digital tokens are distinct from securities offerings.

  • H.R. 8373 - the Digital Commodity Exchange Act of 2020 (see previous coverage), as it would allow digital commodity exchanges to choose whether to be subject to federal oversight or seek money transmitter licensing on a state-by-state basis, but would maintain (i) the SEC's authority over tokens before they are listed on CFTC-registered exchanges and (ii) states' fraud liability authority.

  • SEC Commissioner Hester Peirce's proposed "safe harbor" (see previous coverage), as it would establish an "innovation sandbox" for network and product developers while affording no protections to firms for fraudulent activity.


Ripple states that “technologies like cryptocurrency and blockchain require new regulatory paradigms” (emphasis added). Yet, fundamentally, Ripple’s proposal is to establish cryptocurrency regulation through the use of existing financial regulatory frameworks. As with Coinbase’s policy proposal, critical questions remain unanswered:

  • How will use of existing financial regulatory frameworks adequately account for the extent to which digital asset markets operate differently from traditional financial markets?
  • Where do the characteristics of digital assets merit the application of traditional financial regulatory principles and best practices or of novel principles?
  • Why should the regulatory framework to which an asset is subject be different solely due to the digital or non-digital nature of the asset?
  • How should novel regulatory issues posed by digital assets and new technologies, such as “desecuritization” and “gamification,” be addressed?