In his Digital Commodities Exchange Act, Congressman Glenn Thomson also proposes establishing a new regulatory regime for crypto exchanges at the CFTC.
Ripple Labs is calling to limit the US Securities and Exchange Commission’s (SEC) role in policing cryptocurrencies.
“The SEC’s approach under the current administration has been hostile,” Stuart Alderoty, Ripple’s general counsel, said in an interview. He added that the agency is “doubling down on regulation by enforcement” rather than setting clear rules.
Ripple is currently in a court battle with the SEC regarding the sale of its token XRP, which the agency alleges to be an unregistered security offering.
The company has now released a paper that calls on regulators and lawmakers to create a framework to oversee the crypto market. The paper proposes guidelines that it says are “a real approach to cryptocurrency regulation” created following discussions with regulators and members of Congress.
These guidelines offer advantages to firms compared to SEC’s “regulation-by-enforcement approach,” said Ripple CEO Brad Garlinghouse.
Ripple proposes a three-pronged approach that creates digital asset innovation sandboxes, public-private collaboration and adapts existing regulatory frameworks.
Our proposed policy framework is a three-pronged approach of what can be done now to provide clarity to one of the fastest-growing industries in the U.S. It’s also the result of our direct interactions with regulators and bipartisan policymakers. 1/2 https://t.co/LWyemn1lkx
— Brad Garlinghouse (@bgarlinghouse) November 16, 2021
It also includes endorsements of proposed bills in Congress, including the Digital Commodity Exchange Act, which would give the CFTC authority to regulate digital assets trading.
“This rational approach to crypto regulation that we’re proposing is to basically say, ‘Look, there are other leaders in the space. The SEC does not have a monopoly on this issue,’” Alderoty told Protocol.
In his interview, he further called for creating a federal regime and giving “that responsibility that oversight to the CFTC” in his interview.
With no uniform federal regulatory regime to monitor or regulate crypto exchanges where these crypto-assets trade, including CFTC, exchanges won’t be free from regulation, but there would be a rational approach to regulating crypto, said Alderoty.
This “can allow innovation to thrive, which can allow the assets to be traded, but also guard against things like fraud, guard against market manipulation, so consumers are protected,” he added.
.@Ripple’s policy framework is out! We focused on a pragmatic approach, built through our conversations with regulators and policymakers, & with an immediate plan of action through what’s been proposed in Congress and current regulatory frameworks. 1/2 https://t.co/groPZ0JBmj
— Susan Friedman (@ss_friedman) November 16, 2021
Amidst this, Congressman Glenn Thomson released the Digital Commodities Exchange Act, which would establish a new regulatory regime for crypto exchanges at the CFTC.
The leading Republican on the House Agriculture Committee wants some initial coin offering (ICO) that would certainly be considered securities to be left with the SEC, unlike SEC Chair Gary Gensler, who urges Congress to give the agency more power over crypto exchanges and the overall market.
In his bill, Thomas argued for CFTC to have “exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of any digital commodity in interstate commerce which is offered, solicited, traded, executed, or otherwise dealt in on or subject to the rules of a registered entity, including the conduct of any such office or business.”