Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has issued a sharp warning to lawmakers, cautioning that a proposed Senate bill on digital assets could deepen regulatory confusion and place long-standing cryptocurrencies like XRP under indefinite supervision by the U.S. Securities and Exchange Commission (SEC). Concerns Over Expanded SEC Jurisdiction On August 5, Alderoty sub mitted a formal response to the U.S. Senate Committee on Banking, Housing, and Urban Affairs regarding the committee’s draft legislation. While the bill aims to establish a clearer division of authority between the SEC and the Commodity Futures Trading Commission (CFTC), Alderoty argued that it would instead blur boundaries and subject most tokens to unnecessary federal control. According to Alderoty, the proposed framework would extend the SEC’s reach far beyond its traditional scope by imposing a gatekeeping and disclosure regime on projects and tokens whose transactions fall outside conventional securities law. He said the language of the bill risks creating enduring uncertainty rather than the market clarity the industry has long requested . “Ancillary Assets” Definition Sparks Alarm Alderoty highlighted that the draft’s definition of “ancillary assets” could have sweeping consequences. Under its current wording, any digital asset ever sold as part of an investment contract could remain under SEC jurisdiction indefinitely. He argued that this fails to recognize how assets can mature into widely used network tokens with no link to securities offerings. He warned that applying permanent SEC oversight to established assets such as Ethereum, Solana, and XRP, despite their use on open, permissionless networks, ignores present-day market realities and risks slowing technological progress. Criticism of Unrestricted Howey Test Use Ripple also criticized the bill’s ongoing reliance on the Howey test without imposing statutory limits. Alderoty said the test has been applied in overly broad and subjective ways by past administrations, giving regulators near-unchecked authority. He urged Congress to set clear legal standards to curb overreach and ensure regulatory consistency. We are on X, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) June 15, 2025 Proposed Legislative Reforms Alderoty called for a grandfathering exemption to protect long-traded tokens from new SEC authority, limits on redefining related-party transactions, and explicit protections for protocol-level activities, such as staking and consensus mechanisms. He also pushed for federal preemption over conflicting state laws in core areas of digital asset regulation, including market structure, stablecoins, custody rules, and token classification, while leaving states with oversight on fraud and consumer protection. While Ripple’s legal battle with the SEC is over , there is much work to be done. Alderoty noted that without significant revisions, the bill could deepen the uncertainty it aims to resolve, and urged lawmakers to adopt a balanced framework that offers genuine clarity and limits regulatory overreach. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on X , Facebook , Telegram , and Google News The post Ripple CLO Warns: This Crypto Bill Could Trap XRP In Endless Regulatory Watch appeared first on Times Tabloid .
