Key Takeaways
- • Ripple Labs has sent a letter to the SEC backing the agency's proposed Regulation Crypto Assets framework and arguing that cryptocurrencies should not automatically be classified as securities because they were initially sold through investment contracts.
- • Ripple argues that an investment contract, not the underlying token, is the security, and that a token should no longer be tied to that contract once the issuer fulfills, abandons or terminates the promises that created it.
- • Ripple wants the principle that its ongoing business growth, XRPL development and blockchain promotion do not automatically make XRP a security embedded in binding SEC rules, citing the XRP court ruling as support.
- • Ripple urged the SEC to reject decentralization tests and company-backed token classifications, and to adopt broader safe harbor protections under investment company and adviser laws.
- • A National Cryptocurrency Association study estimates clearer rules could have added 382 to 1,518 token offerings and $325 million to $1.12 billion in U.S. capital raised between 2022 and October 2026.
Summary
Ripple Labs has sent a letter to the U.S. Securities and Exchange Commission backing the agency's proposed Regulation Crypto Assets framework. The company's central argument is that cryptocurrencies should not be automatically classified as securities simply because they were initially sold through investment contracts. According to the letter, shared on a Tuesday, Ripple supports the SEC's move away from enforcement-driven regulation toward clear, binding rules, particularly after the Clarity Act failed to advance in the Senate.
Ripple contends that an investment contract involving a cryptocurrency is the security, not necessarily the underlying token, and cites the XRP court ruling in support of that distinction. The company argues that a token should no longer be tied to an investment contract once an issuer fulfills, abandons or terminates the promises that created the investment relationship. Ripple also maintains that its continued business growth, development of the XRP Ledger (XRPL) and promotion of blockchain products should not automatically make XRP a security. The company wants this principle written into binding SEC regulations, which it says could give exchanges, institutions and investors more predictable legal treatment.
Beyond the classification question, Ripple urged the SEC to reject decentralization tests and company-backed token classifications, arguing that corporate support or blockchain development should not by itself make a token a security. It also called for broader safe harbor protections under investment company and adviser laws, allowing exchanges to rely on Form TR filings and providing appropriate state-law preemption for secondary-market trading.
A study by the National Cryptocurrency Association, cited in the letter, estimates that clearer crypto regulations could have produced 382 to 1,518 additional token offerings and $325 million to $1.12 billion in capital raised in the U.S. between 2022 and October 2026. The study attributes much of that gain to projects raising funds domestically rather than overseas. These figures are estimates and not realized outcomes.
Ripple contends that an investment contract involving a cryptocurrency is the security, not necessarily the underlying token, and cites the XRP court ruling in support of that distinction. The company argues that a token should no longer be tied to an investment contract once an issuer fulfills, abandons or terminates the promises that created the investment relationship. Ripple also maintains that its continued business growth, development of the XRP Ledger (XRPL) and promotion of blockchain products should not automatically make XRP a security. The company wants this principle written into binding SEC regulations, which it says could give exchanges, institutions and investors more predictable legal treatment.
Beyond the classification question, Ripple urged the SEC to reject decentralization tests and company-backed token classifications, arguing that corporate support or blockchain development should not by itself make a token a security. It also called for broader safe harbor protections under investment company and adviser laws, allowing exchanges to rely on Form TR filings and providing appropriate state-law preemption for secondary-market trading.
A study by the National Cryptocurrency Association, cited in the letter, estimates that clearer crypto regulations could have produced 382 to 1,518 additional token offerings and $325 million to $1.12 billion in capital raised in the U.S. between 2022 and October 2026. The study attributes much of that gain to projects raising funds domestically rather than overseas. These figures are estimates and not realized outcomes.
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