Ripple has endorsed the U.S. Securities and Exchange Commission’s proposed Regulation Crypto Assets framework while requesting amendments to clarify how securities laws apply to digital assets. Chief Legal Officer Stuart Alderoty says the company spent more than $150 million seeking legal clarity and wants consistent rules that distinguish cryptocurrency tokens from the investment contracts through which they may be sold.
Key Overview
- Ripple filed a 20-page comment letter supporting the SEC’s proposed crypto framework on October 20, 2026.
- The company says its legal battle with the SEC cost more than $150 million.
- Ripple argues that an investment contract should not automatically make the associated cryptocurrency a security.
- It wants clearer rules for issuer obligations, Form TR filings and secondary-market transactions.
- The SEC’s proposed fundraising exemptions include limits of $5 million over four years and $75 million over 12 months.
Ripple Shifts From Litigation to Regulatory Engagement
Ripple is supporting the SEC’s proposed Regulation Crypto Assets framework, signalling a move towards direct engagement with regulators after years of legal disputes over XRP.
In a comment letter submitted on October 20, Ripple backed the regulator’s proposal while requesting changes to the treatment of investment contracts, issuer obligations and secondary-market transactions. The company believes clearer requirements could reduce uncertainty for digital asset businesses operating in the United States.
Ripple’s Chief Legal Officer, Stuart Alderoty, said the company had spent more than $150 million seeking legal clarity. His position reflects the company’s argument that cryptocurrency firms should not have to endure lengthy court proceedings simply to establish how securities laws apply to their activities.
The proposed framework for digital asset regulation gives Ripple an opportunity to influence how the rules are finalised rather than relying solely on litigation to resolve regulatory questions.
The Difference Between a Token and an Investment Contract
A central issue in Ripple’s submission is whether a cryptocurrency should automatically be classified as a security because it was offered or sold through an investment contract.
Ripple argues that the investment arrangement and the digital asset itself should be assessed separately. Its position draws on the Howey test, a legal framework used to determine whether an arrangement qualifies as an investment contract under US securities law.
The company supports assessing whether an issuer has fulfilled or permanently stopped the essential managerial activities promised to investors. However, it opposes making decentralisation a separate legal requirement for determining when those obligations end.
Alderoty’s argument is that the investment contract is the security, rather than the associated token automatically carrying that classification in every context. Ripple wants regulators to focus on the promises made to investors and whether those commitments remain in effect.
The distinction could matter for cryptocurrency projects seeking to understand when their original fundraising arrangements no longer determine the legal treatment of their tokens.
Proposed Exemptions Could Change Crypto Fundraising
The SEC’s proposed framework includes exemptions for certain qualifying cryptocurrency offerings. One pathway would allow eligible projects to raise up to $5 million over four years, while another would permit offerings of up to $75 million within 12 months, subject to disclosure and financial reporting requirements.
Ripple supports the proposed exemptions for certain cryptocurrency offerings, but wants greater certainty around how the framework operates in practice. These provisions remain proposals and are not yet in force.
The company’s broader concern is that new rules should provide predictable requirements for businesses, investors and market intermediaries. Fundraising exemptions may create additional options for eligible projects, but their practical effect will depend on the final conditions and how regulators implement them.
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Ripple Wants Clearer Trading and Filing Requirements
Ripple is also seeking clarification on Form TR, a proposed filing intended to establish that an issuer has completed or permanently ceased specified managerial activities associated with an investment contract.
The company wants exchanges and brokers to be able to rely on properly filed documentation when determining how to handle a token. Without consistent rules, intermediaries could remain uncertain about whether an issuer’s subsequent actions affect the asset’s legal classification.
Ripple is also requesting additional clarity on Form TR filings, federal securities classifications and secondary-market transactions.
These issues extend beyond the original issuer. Exchanges, brokers, investment funds and advisers may also need clear guidance to determine how securities requirements apply when digital assets are traded or held after an initial offering.
Why the Proposal Matters for the US Crypto Industry
Ripple’s support highlights the importance of regulatory certainty for companies operating in digital assets. The company has argued that years of case-by-case enforcement have made it difficult for businesses to assess their legal obligations and have encouraged some innovation to move overseas.
A more consistent framework could help businesses understand their responsibilities before launching products or offering tokens. It could also provide investors with clearer information about the legal status of digital asset offerings.
However, Ripple’s endorsement does not mean it agrees with every part of the proposal. Its requested revisions show that important questions remain over token classification, issuer commitments and protections for secondary-market participants.
Outlook
Ripple’s submission adds to the debate over how the United States should regulate digital assets. Its support for the SEC’s proposed framework, combined with calls for specific changes, shows that the company is seeking clearer rules rather than rejecting regulation altogether.
The next step is for the SEC to consider public feedback before deciding how to proceed with the proposal. The final wording will determine whether the framework addresses the uncertainties raised by Ripple and other market participants.
For the broader crypto industry, the outcome could influence how projects raise capital, how exchanges assess listed tokens and how businesses determine when securities obligations apply. Until the rules are finalised, the proposed exemptions and classification provisions should not be treated as current regulatory permissions.
FAQs
1. Why is Ripple supporting the SEC’s proposed crypto rules?
Ripple believes a clearer regulatory framework could reduce uncertainty around digital asset classification and replace prolonged case-by-case legal disputes with more consistent requirements.
2. How much did Ripple say it spent seeking legal clarity?
Ripple Chief Legal Officer Stuart Alderoty said the company spent more than $150 million seeking clarity during its legal conflict with the SEC.
3. What changes does Ripple want to the proposed framework?
It wants clearer distinctions between tokens and investment contracts, more certainty around issuer obligations and Form TR filings, and better-defined treatment of secondary-market transactions.
4. Are the SEC’s proposed crypto exemptions already in force?
No. The proposed exemptions remain part of the draft framework. They would allow qualifying offerings of up to $5 million over four years or $75 million within 12 months, subject to the applicable conditions, if adopted.
Sources: BTCC | CaptainAltcoin | Crypto Daily
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