SEC Task Force Responds to Ripple's Concerns on Crypto Regulation

A recent response on the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force page has highlighted ongoing debates regarding the regulation of cryptocurrencies under federal securities laws. According to Cointelegraph, the response, authored by digital asset regulation attorney Teresa Goody Guillen, was published as public input on the SEC’s website. Guillen argued that merely holding a 'passive economic interest,' such as purchasing a token with the hope of price appreciation, should not automatically subject digital assets to securities regulation. Instead, she suggested that a broader set of factors should be considered on a sliding scale to assess digital assets. Guillen expressed agreement with Ripple's stance that frameworks equating passive economic interest with securities laws mistakenly confuse speculation with investment rights. Her comments, however, were not intended to establish a binding regulatory framework and do not reflect official SEC policy. This letter was a response to Ripple’s January 9 submission, which raised concerns about the current market structure draft bill. Ripple proposed that the term 'decentralization' should not be a legal metric and that passive economic interests should not trigger securities laws, as they conflate speculation with investor rights. In a separate development, Guillen released a discussion draft for the 'Digital Markets Restructure Act of 2026,' which has not yet received approval from SEC or Commodity Futures Trading Commission (CFTC) leadership. The draft suggests classifying certain cryptocurrencies as 'Digital Value Instruments' if they do not fit existing categories like securities or commodities. These would be classified as such if they exhibit at least three of five characteristics: free transferability, passive economic interest, limited individual contractual rights, systemic dependency on the enterprise or protocol sponsor, or lack of ability to discipline or replace systems affecting the instrument’s value or operations. The draft also proposes risk-based jurisdictions for the SEC and CFTC, federal preemptions for inconsistent state law applications, and safe harbor provisions to foster innovation. The publication of these submissions precedes a joint SEC-CFTC meeting scheduled for Thursday to discuss regulatory coordination on digital assets. Initially planned for Tuesday, the 'harmonization' event was postponed by two days and will include a fireside chat with SEC Chair Paul Atkins and CFTC Chair Mike Selig. Additionally, the U.S. Senate Agriculture Committee delayed its markup for the crypto market structure bill due to a severe winter storm affecting the U.S.