Key Takeaways
- • Ripple filed a roughly 20-page comment letter on October 20, the final day of the public comment period, fully supporting the SEC's proposed Regulation Crypto Assets and urging the Commission to adopt it as a final rule.
- • Ripple argues an investment contract can be a security without the underlying token being a security, and that such a contract ends when an issuer completes or permanently ceases its essential managerial efforts.
- • Ripple's Chief Legal Officer Stuart Alderoty said the company spent more than $150 million in its long-running litigation with the SEC over XRP.
- • The proposal would offer startup exemptions allowing up to $5 million raised over four years and up to $75 million in a 12-month period, plus a conditional safe harbour for existing projects.
- • A coalition including Chainlink Labs, Cardano Foundation, Hedera, Ava Labs, Stellar Development Foundation and Aptos Labs filed a joint letter urging the SEC to codify digital commodity classifications.
Summary
Ripple Labs has urged the U.S. Securities and Exchange Commission to adopt final rules for crypto assets, submitting a detailed comment letter on October 20, the last day of the public comment period on the SEC's proposed Regulation Crypto Assets. The proposal, released by the SEC on August 18, aims to create a clearer framework for certain investment contracts involving digital assets. Ripple and other industry participants argue that formal rules would replace case-by-case enforcement and help keep innovation in the United States.
In the approximately 20-page letter addressed to SEC Secretary Vanessa A. Countryman, which Ripple's Chief Legal Officer Stuart Alderoty shared publicly on X, Ripple said the framework is consistent with the Supreme Court's Howey test. A central point of the filing is the distinction between a crypto asset and any investment contract under which it may have been offered. Ripple supports determining the end of an investment contract by whether an issuer has completed or permanently ceased the essential managerial efforts promised to investors, rather than relying on a subjective decentralization test.
Alderoty highlighted the cost of the prior approach, noting that Ripple spent more than $150 million in its litigation with the SEC over XRP. He wrote that "Years of 'case by case, coin by coin' enforcement have pushed innovation offshore. We need holistic rules for digital assets." The letter also requested greater certainty around Form TR filings, which would let exchanges and brokers rely on an issuer's declaration that key promises have ended, consistent treatment of separated crypto assets across securities laws, and clearer guidance on secondary-market transactions.
The proposal includes tailored registration exemptions. One would allow startups to raise up to $5 million over four years, and a second would permit offerings of up to $75 million in a 12-month period, subject to additional disclosure and reporting requirements. Issuers would still face antifraud provisions. A conditional safe harbour would allow a crypto asset to be treated as no longer part of an investment contract once an issuer shows that important managerial efforts have ceased and no new material promises are made. Industry analysts have noted this could be especially useful for existing projects seeking clarity on secondary-market status. The framework builds on a March 2026 joint interpretive release by the SEC and the Commodity Futures Trading Commission.
Alongside Ripple's submission, Chainlink Labs, the Cardano Foundation, Hedera, Ava Labs, the Stellar Development Foundation and Aptos Labs filed a joint comment letter urging the SEC to codify digital commodity classifications, arguing this would strengthen U.S. competitiveness and reduce legal ambiguity for networks widely viewed as decentralized. Other market participants, including groups associated with Hyperliquid, also submitted comments on token trading, airdrops and related activities.
In the approximately 20-page letter addressed to SEC Secretary Vanessa A. Countryman, which Ripple's Chief Legal Officer Stuart Alderoty shared publicly on X, Ripple said the framework is consistent with the Supreme Court's Howey test. A central point of the filing is the distinction between a crypto asset and any investment contract under which it may have been offered. Ripple supports determining the end of an investment contract by whether an issuer has completed or permanently ceased the essential managerial efforts promised to investors, rather than relying on a subjective decentralization test.
Alderoty highlighted the cost of the prior approach, noting that Ripple spent more than $150 million in its litigation with the SEC over XRP. He wrote that "Years of 'case by case, coin by coin' enforcement have pushed innovation offshore. We need holistic rules for digital assets." The letter also requested greater certainty around Form TR filings, which would let exchanges and brokers rely on an issuer's declaration that key promises have ended, consistent treatment of separated crypto assets across securities laws, and clearer guidance on secondary-market transactions.
The proposal includes tailored registration exemptions. One would allow startups to raise up to $5 million over four years, and a second would permit offerings of up to $75 million in a 12-month period, subject to additional disclosure and reporting requirements. Issuers would still face antifraud provisions. A conditional safe harbour would allow a crypto asset to be treated as no longer part of an investment contract once an issuer shows that important managerial efforts have ceased and no new material promises are made. Industry analysts have noted this could be especially useful for existing projects seeking clarity on secondary-market status. The framework builds on a March 2026 joint interpretive release by the SEC and the Commodity Futures Trading Commission.
Alongside Ripple's submission, Chainlink Labs, the Cardano Foundation, Hedera, Ava Labs, the Stellar Development Foundation and Aptos Labs filed a joint comment letter urging the SEC to codify digital commodity classifications, arguing this would strengthen U.S. competitiveness and reduce legal ambiguity for networks widely viewed as decentralized. Other market participants, including groups associated with Hyperliquid, also submitted comments on token trading, airdrops and related activities.
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