Ripple Warns Senate: The New Crypto Bill Could Enable SEC “Overreach”

Ripple Labs formally pushed back against a new US Senate draft bill – the Responsible Financial Innovation Act of 2025 – aimed at regulating the cryptocurrency market. The company behind the XRP Ledger warned that the proposed legislation could grant the Securities and Exchange Commission (SEC) excessive and indefinite power over major digital assets.

In a detailed response submitted on 5 August 2025, Ripple argued that the bill in its current form would create more confusion than clarity. The company warned that the bill could stifle innovation and subject established tokens like XRP, Ethereum (ETH), and Solana (SOL) to perpetual regulatory oversight.

“The draft creates more ambiguity than clarity for the industry in its attempt to delineate SEC jurisdiction over digital assets,” said Ripple. “It brings most tokens and projects into an SEC-administered gatekeeping and disclosure regime, even when sales or project activity fall outside the SEC’s traditional scope.”

Ripple’s Chief Legal Officer, Stuart Alderoty, has officially responded to the U.S. Senate Banking Committee on digital asset regulation.

He warns: the proposed bill gives too much unchecked power to the SEC.

No clarity = no innovation. #XRP #Ripple #CryptoRegulation pic.twitter.com/BCORNPtTZk

— John Squire (@TheCryptoSquire) August 6, 2025

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Current Definition of “Ancillary Asset” Risks Significant Regulatory Overreach

Ripple, with first-hand experience of being in high-stakes legal battle with the SEC, claims that the bill contains vague language and could be manipulated by regulators to expand their authority.

“The current definition of “ancillary asset” risks significant regulatory overreach because it effectively presumes that any token once offered in connection with an investment contract places future transactions of that token by the “originator” under SEC jurisdiction—indefinitely,” the company stated.

Ripple’s Chief Legal Officer, Stuart Alderoty, contends that the SEC’s authority should be strictly limited to the specific transaction that qualifies as an investment contract under the Howey Test. The proposed bill would allow the SEC to use a token’s historical sale as a pretext to regulate all future transactions on secondary markets.

Alderoty said that the draft provides a “backdoor to assert jurisdiction over present-day transactions based on conduct that is either irrelevant to the transaction at issue or barred from enforcement by fundamental legal protections.”

Explore: XRP Just Hit All Time High: Ripple Crypto Touched $3.65 Before Retracing Back

XRP ATH: Ripple Touched $3.65 In July Before Retracing

XRP hit an all-time high of $3.65 on the 18th of July before cooling off slightly to around $3.46. That puts it above its 2018 peak and firmly back in the spotlight. It’s not just retail euphoria pushing this one. Institutional interest this time looks stronger, with XRP ▲1.27% overtaking Tether to become the third biggest crypto by market cap. Trading volume went parabolic into tens of billions, something you cannot see every day.

After years of dormancy and courtroom drama, XRP just silenced all skeptics with an all-time high power move. On the 18th of July, 2025, XRP hit $3.65, finally topping the $3,40 record from back in 2018. Although the coin retraced, this rally wasn’t some fluke by any means. Market data shows XRP’s spot volume surged to $20 billion, with derivatives clocking in over $46 billion. This is a 135% surge for the spot and a 162% for the derivatives.

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Key Takeaways

Ripple’s concerns extend beyond just token classification. The company urged lawmakers to provide clear rules on which core blockchain activities—such as staking, mining, and participating in governance—should be regulated as securities.

Given its decade-long experience navigating the murky waters of US crypto regulation, Ripple stated it is in a prime position to weigh in on the proposed legislation.