The uncertain regulatory landscape for crypto startups in the U.S remains an issue of debate for both industry participants and relevant lawmaking bodies such as the Congress and the Securities and Exchanges Commission (SEC).
However, with little to nothing currently being done by either regulatory agency to ease the pressure on the industry, Ripple CEO, Brad Garlinghouse and co-founder Chris Larsen wrote an open letter to Congress on Sunday, July 29.
The subject as you can already guess is the regulatory uncertainty facing crypto projects.
First, the fact that industry is considered by U.S authorities to be a breeding ground for bad actors and then, the decision of the SEC to continue labeling nearly all cryptocurrencies as securities, instead of creating a separate regulatory framework.
Regarding the first issue, the Ripple team wrote,
“Please do not paint us with a broad brush. Many in the blockchain and digital currency industry are responsible actors. We are responsible to U.S. and international law. We are responsible to serving the greater good.”
The team then acknowledged the vital role that central banks play in the issuing of currencies and monetary policy.
Rather than suggest that cryptocurrencies like XRP would replace these currencies, the open letter asserted that “digital currencies have the opportunity to complement existing currencies like the U.S. dollar.”
To this end, the Ripple team called on the U.S government to lead the way for the emerging industry by nurturing the economic opportunity and continuing to protect privacy and stability.
Failure to do so, according to the open letter would force crypto companies to continue seeking regulatory refuge abroad, a factor that likely contributed to Facebook deciding to set up its Libra currency Association elsewhere.
“Without regulatory clarity, we risk pushing the innovation, tax revenue and jobs that these new technologies create overseas [..…] Let’s come together and seize the moment.” the Ripple open letter concludes.
Meanwhile, the latest move by Ripple is only one of the many efforts currently seeking clear regulations for crypto firms in the U.S.
Kik, a Canada-based messaging platform, is currently preparing for a lawsuit against the SEC who alleged that the startup violated securities law when it raised funds from U.S investors in a 2017 ICO.
U.S Congressman Warren Davidson is also leading a proposed bill dubbed Token Taxonomy Act, with the goal of clarifying the regulatory status of the different kinds of cryptocurrencies that exist.