Key Takeaways
- • Ripple filed a 20-page comment letter on October 20, 2026 backing the SEC's proposed Regulation Crypto Assets while seeking changes to how investment contracts, issuer obligations and secondary-market transactions are treated.
- • Ripple argues an investment contract can be a security without the underlying token being a security, and asks the SEC to end investment contracts based on an issuer's promises rather than a decentralization test.
- • Ripple says its prior litigation with the SEC cost more than $150 million, according to Chief Legal Officer Stuart Alderoty's post on X.
- • The SEC's proposal includes exemptions allowing eligible startups to raise up to $5 million over four years and offerings of up to $75 million within 12 months, neither of which is currently in force.
- • Ripple seeks greater certainty on Form TR filings and secondary-market treatment under Rule 500 so exchanges, brokers and investment funds can rely on consistent classifications.
Summary
Ripple has urged the U.S. Securities and Exchange Commission to adopt its proposed Regulation Crypto Assets, arguing that clearer rules could prevent cryptocurrency companies from facing costly legal disputes over whether their tokens fall under securities laws. In a 20-page comment letter filed October 20, the company supported the regulator's proposed exemptions for certain crypto offerings while requesting changes to how investment contracts, issuer obligations and secondary-market transactions are handled. Ripple Chief Legal Officer Stuart Alderoty confirmed the submission in a post on X, stating that the company's past litigation had cost more than $150 million and arguing that businesses should not need years of court proceedings to determine their obligations under federal law.
Ripple's central argument separates a digital asset from the investment contract under which it may have been offered or sold. Relying on the Supreme Court's Howey test, the company says an investment contract can qualify as a security without automatically making the associated token a security. Under the SEC's proposal, an investment contract would end once an issuer has completed or permanently stopped the essential managerial activities it promised investors, provided it makes no new commitments of that kind. Ripple supports this approach but opposes making decentralization a separate legal requirement, arguing that measures such as governance participation, node distribution, software contributions and economic control cannot reliably determine whether contractual commitments remain in effect. It instead asks regulators to examine what an issuer expressly promised and whether those promises have been fulfilled or withdrawn.
The SEC unveiled Regulation Crypto Assets in August, proposing two registration exemptions for qualifying investment contracts involving digital assets: one allowing eligible startups to raise up to $5 million over four years, and another permitting offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements. Neither exemption is in force under the proposed framework. Ripple also supports the draft's safe harbor addressing when a cryptocurrency is no longer associated with an investment contract. Galaxy Research, as previously reported by crypto.news, estimated that hundreds of token issuers could eventually use this process, and argued it may be more useful to some existing projects than the new fundraising exemptions.
Among its requested changes, Ripple seeks greater certainty around Form TR, the proposed public filing used to establish that an issuer has completed or permanently ceased its essential managerial activities. The company argues exchanges and brokers should be able to rely on a properly filed form when deciding whether to trade a token. It also wants consistent treatment of separated crypto assets across the Securities Act, Exchange Act, Investment Company Act and Investment Advisers Act, warning that recognition under only two statutes could leave investment funds and advisers facing divergent interpretations. Further clarification on whether ordinary secondary-market trading should be considered part of an issuer's original arrangement under Rule 500 is also requested. Separately, Hyperliquid's policy group submitted recommendations on token trading, airdrops and buybacks.
Ripple's position reflects its prior litigation with the SEC over XRP sales. In July 2023, a federal judge ruled that XRP itself was not inherently an investment contract, while distinguishing between types of transactions involving the token. The filing notes that exchanges including Coinbase and Kraken restored XRP trading for U.S. customers after that decision. Citing industry research, Ripple says the U.S. share of global crypto developers fell from 38% in 2015 to 19% in 2024, and reports its U.S. hiring doubled in 2024 compared with 2023. The company argues formal rules would be more durable than interpretations or enforcement policies that future SEC leadership could reverse. The public comment deadline was October 20, and the proposal remains subject to SEC review and possible revisions before any final rule is adopted.
Ripple's central argument separates a digital asset from the investment contract under which it may have been offered or sold. Relying on the Supreme Court's Howey test, the company says an investment contract can qualify as a security without automatically making the associated token a security. Under the SEC's proposal, an investment contract would end once an issuer has completed or permanently stopped the essential managerial activities it promised investors, provided it makes no new commitments of that kind. Ripple supports this approach but opposes making decentralization a separate legal requirement, arguing that measures such as governance participation, node distribution, software contributions and economic control cannot reliably determine whether contractual commitments remain in effect. It instead asks regulators to examine what an issuer expressly promised and whether those promises have been fulfilled or withdrawn.
The SEC unveiled Regulation Crypto Assets in August, proposing two registration exemptions for qualifying investment contracts involving digital assets: one allowing eligible startups to raise up to $5 million over four years, and another permitting offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements. Neither exemption is in force under the proposed framework. Ripple also supports the draft's safe harbor addressing when a cryptocurrency is no longer associated with an investment contract. Galaxy Research, as previously reported by crypto.news, estimated that hundreds of token issuers could eventually use this process, and argued it may be more useful to some existing projects than the new fundraising exemptions.
Among its requested changes, Ripple seeks greater certainty around Form TR, the proposed public filing used to establish that an issuer has completed or permanently ceased its essential managerial activities. The company argues exchanges and brokers should be able to rely on a properly filed form when deciding whether to trade a token. It also wants consistent treatment of separated crypto assets across the Securities Act, Exchange Act, Investment Company Act and Investment Advisers Act, warning that recognition under only two statutes could leave investment funds and advisers facing divergent interpretations. Further clarification on whether ordinary secondary-market trading should be considered part of an issuer's original arrangement under Rule 500 is also requested. Separately, Hyperliquid's policy group submitted recommendations on token trading, airdrops and buybacks.
Ripple's position reflects its prior litigation with the SEC over XRP sales. In July 2023, a federal judge ruled that XRP itself was not inherently an investment contract, while distinguishing between types of transactions involving the token. The filing notes that exchanges including Coinbase and Kraken restored XRP trading for U.S. customers after that decision. Citing industry research, Ripple says the U.S. share of global crypto developers fell from 38% in 2015 to 19% in 2024, and reports its U.S. hiring doubled in 2024 compared with 2023. The company argues formal rules would be more durable than interpretations or enforcement policies that future SEC leadership could reverse. The public comment deadline was October 20, and the proposal remains subject to SEC review and possible revisions before any final rule is adopted.
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