Key Highlights
- Ripple filed a detailed comment letter on October 20, supporting the SEC’s proposed Regulation Crypto Assets and urging the SEC to adopt it as a final rule.
- The company stated that investment contracts under the Howey test can end once issuers fulfill or stop key promises, and it spent over $150 million in prior litigation seeking clarity.
- A coalition including Chainlink, Cardano, Hedera, Avalanche, Stellar, and Aptos also pushed the SEC to codify digital commodity classifications and reduce regulatory uncertainty.
Ripple Labs and a coalition of major blockchain organizations have urged the U.S. Securities and Exchange Commission (SEC) to adopt final rules for crypto assets, ending years of regulatory uncertainty.
On October 20, the final day of the public comment period, Ripple submitted a detailed letter in support of 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.
Ripple Writes Letter to SEC
Ripple’s Chief Legal Officer, Stuart Alderoty, shared this letter in public via X (formerly known as Twitter). In its approximately 20-page letter addressed to SEC Secretary Vanessa A. Countryman, Ripple expressed full support for the proposal and called on the Commission to adopt it as a final rule. The company said that the framework is consistent with the Supreme Court’s Howey test, which defines an investment contract as involving an investment of money in a common enterprise with profits expected from the efforts of others.
A central point in Ripple’s filing is the distinction between a crypto asset itself and any investment contract under which it may have been offered. The company argued that an investment contract can be a security without making the associated token a security. It supports determining when an investment contract ends by looking at whether an issuer has completed or permanently ceased the essential managerial efforts promised investors, rather than relying on a subjective decentralization test.
Ripple Chief Legal Officer Stuart Alderoty highlighted the costs of the prior approach. He noted that the company spent more than $150 million in its long-running litigation with the SEC over XRP. In a post on X, Alderoty stated 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 refinements. These include greater certainty around Form TR filings that would allow exchanges and brokers to 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.
Regulation Crypto Assets would create tailored registration exemptions. One pathway would allow startups to raise up to $5 million over 4 years. A second exemption 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.
The proposal also includes a conditional safe harbour. Once an issuer meets specified conditions showing that important managerial efforts have ceased and no new material promises are made, the associated crypto asset could be treated as no longer part of an investment contract. Industry analysts have noted that this mechanism could prove 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 that began clarifying how federal securities laws apply to crypto assets.
Building on the March 2026 SEC-CFTC Interpretive Release
Alongside Ripple’s submission, a group of blockchain organizations, including Chainlink Labs, the Cardano Foundation, Hedera, Ava Labs (Avalanche), the Stellar Development Foundation, and Aptos Labs, filed a joint comment letter. The coalition urged the SEC to codify classifications for digital commodities, arguing that clearer status would strengthen U.S. competitiveness and reduce legal ambiguity for networks already widely viewed as decentralized.
Apart from this, other market participants, including groups associated with platforms such as Hyperliquid, also submitted comments seeking clarifications on specific aspects of token trading, airdrops, and related activities.
This comes after a week when Ripple CEO outlined a detailed plan for the Ripple ecosystem. On October 14, Ripple CEO Brad Garlinghouse revealed his plan for the next phase of the XRP Ledger.
