Key Takeaways
Ripple, after years of dealing with the SEC over XRP, responded to U.S. lawmakers’ work on new crypto rules with some strong but reasonable points.
In 2025, the U.S. Senate rolled out a draft crypto bill and asked the industry for feedback.
Ripple [XRP], fresh off its long fight with the SEC, didn’t hold back. Their main point? The bill’s too vague and opens the door for more confusion, especially around who’s in charge: The SEC or the CFTC.
Right now, it’s a regulatory tug-of-war, and that’s bad for builders.
Ripple says “Ancillary Assets” go too far
In the draft bill, one of Ripple’s biggest concerns is a section called “ancillary assets.” Their concern? It’s too broad, and could treat even legit, decentralized tokens like XRP or Ethereum [ETH] as securities.
For instance, under this language, Ethereum could fall under SEC oversight simply because it held an ICO years ago, despite its current widespread use in DeFi and smart contracts.
Ripple’s proposed fix is straightforward: Tokens that have operated on a public, open blockchain for more than five years should be exempt from SEC jurisdiction. This aligns with XRP’s long legal history and decentralized nature.
Plus, they’re also calling for a clearer regulatory split between the SEC and CFTC. Right now, the overlap creates uncertainty around compliance, clogs up capital flows, and slows down innovation at the protocol layer.
Builders stuck in the middle of a crossfire
Builders (developers, founders, and protocol teams driving the crypto ecosystem) are caught in a regulatory deadlock. As Ripple pointed out, there’s no clear boundaries between the SEC and CFTC.
The SEC tends to treat most tokens as securities, while the CFTC classifies them as commodities. As a result, these teams are forced to spend more time on legal strategy than on actual development.
The result? A measurable talent drain. According to the 2024 Electric Capital Developer Report, the U.S. share of global crypto developers has dropped from 38% in 2015 to just 19%, while Asia now leads with 32%.
Source: Developer Report
Therefore, Ripple’s criticism of the Senate draft isn’t just anti-SEC sentiment. It reflects a deeper reality: Rigid, unclear compliance rules are stalling network growth and pushing builders offshore.
On-chain activity clearly backs it up.
Development is slowing in the U.S.-hosted ecosystems. This isn’t noise. It shows exactly how and why the U.S. is losing ground in Web3, and possibly falling out of the “crypto capital” race altogether.
