The Senate's cryptocurrency bill raises concerns due to regulatory confusion, as Ripple's chief legal advisor warns that it could lead to endless SEC oversight of XRP and similar tokens.

Ripple's chief lawyer warns that the Senate's cryptocurrency bill could undermine market clarity:

Stuart Alderoti, Legal Director of Ripple, submitted an official statement on August 5 to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, criticizing the committee's bill for failing to provide regulatory clarity for the digital asset industry.

In a letter, Alderoti argued that the proposed framework, which attempts to divide jurisdiction between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), would solidify confusion rather than resolve it. He stated:

"The bill creates more ambiguity than clarity for the industry in its attempt to delineate the SEC's jurisdiction over digital assets."

"Includes most tokens and projects under a control and disclosure regime administered by the SEC, even when the sales or activities of the project are outside the traditional scope of the SEC. Additional changes are needed to clarify jurisdictional boundaries and achieve a balanced oversight framework,"

emphasized the chief lawyer of Ripple.

The response expressed concerns about the definition of 'ancillary assets' and its assumption that any token ever sold through an investment contract could remain under the jurisdiction of the SEC indefinitely.

Alderoti emphasized that such an assumption ignores the current utility and trading conditions of mature assets like Ethereum, Solana, and XRP, and disregards the economic realities of their use. He warned:

"This approach could subject widely traded and long-existing tokens operating on open and permissive networks, including ETH, SOL, and XRP, to continuous oversight by the SEC, even when current or future transactions do not exhibit characteristics of a securities offering."

Ripple also strongly opposed the continued use of the Howey test without legislative restrictions, warning that its historical misuse by previous administrations has turned it into an 'instrument of unlimited discretion.'

He recommended that Congress provide specific legislative criteria to avoid additional subjective interpretations and ensure accountability.