Ripple has formally endorsed the U.S. Securities and Exchange Commission’s proposed “Regulation Crypto Assets,” urging the regulator to replace what it calls years of case-by-case enforcement with a clear legal framework. In a 20-page comment letter sent on October 20, the company said regulatory uncertainty has pushed innovation abroad and argued the SEC already has legal authority to adopt the proposal.
Ripple Chief Legal Officer Stuart Alderoty emphasized that the proposal is faithful to the Supreme Court’s Howey test, focusing on the investment contract rather than the token itself. “What matters is what an issuer actually promised and when those promises end, not a subjective ‘decentralized’ test,” Alderoty wrote. Ripple also objected to limiting a proposed safe harbor, Rule 400, to issuers that fulfilled their promises, saying abandoned work can also remove profit expectations. The letter further rejected a split between “company-backed” and “network” tokens and offered a buyback-and-burn example that could create an investment contract.
The SEC’s proposal, revealed in August, includes two exemptions to standard securities registration rules: one allowing qualifying projects to raise up to $5 million over four years and another permitting up to $75 million per year. It would also create a conditional safe harbor for digital assets that no longer meet the definition of investment contracts. Ripple cited its own legal fight: after the SEC sued in December 2020, XRP fell roughly 70% within days and lost about $15 billion in market value, while a July 2023 ruling that XRP is not itself a security added about $21 billion to its market cap and led Coinbase and Kraken to restore U.S. trading. Alderoty noted Ripple spent more than $150 million to obtain that clarity.
The filing points to Section 28 of the Securities Act and Section 36 of the Exchange Act as authority for exempting asset classes, and notes that the failed 49-50 Senate vote on the Digital Asset Market Clarity Act does not remove that power. Ripple also asks for a new Rule 400 clause so that skipping a proposed Form TR creates no presumption that a token is tied to an investment contract, and wants changes to Rule 500(b) covering secondary-market dealers. A National Cryptocurrency Association study cited in the letter estimates clearer rules from 2022 to October 2026 would have produced 382 to 1,518 more U.S. token offerings and $325 million to $1.117 billion in additional capital.
