Ripple Says Crypto Tokens Are Not Securities Once Issuer Commitments End
Ripple has endorsed the U.S. Securities and Exchange Commission’s proposed Regulation Crypto Assets framework, calling for clearer rules on cryptocurrency securities classification. In an October 20 comment letter, the company argued that investment contracts, rather than their underlying digital tokens, should determine securities oversight.
Ripple Chief Legal Officer Stuart Alderoty confirmed the submission, supporting the SEC’s authority to introduce the framework. However, Ripple wants regulators to clarify when investment contracts end and when associated cryptocurrencies no longer face securities regulation.
Ripple Pushes for Clearer Crypto Securities Rules
Ripple’s central argument focuses on separating digital assets from the investment arrangements surrounding their sale. The company maintains that a token does not automatically become a security simply because investors initially purchased it through an investment contract.
Instead, Ripple believes regulatory obligations should depend on the commitments issuers make to investors. Once issuers fulfill or permanently discontinue those commitments, the associated investment contract should no longer govern the token.
The company also opposes using decentralization as an independent legal requirement for ending securities oversight. Ripple argues that regulators should examine specific issuer promises rather than rely on subjective measurements of network decentralization.
SEC Proposal Introduces New Fundraising Exemptions
The SEC introduced Regulation Crypto Assets in August 2026 to establish a tailored regulatory framework for cryptocurrency offerings. The proposal includes exemptions designed to help blockchain businesses raise capital while maintaining investor protections.
One proposed exemption would allow eligible startups to raise up to $5 million over four years. Another would permit qualifying cryptocurrency offerings of up to $75 million within 12 months, subject to additional disclosure requirements.
The framework also proposes a conditional safe harbor addressing when digital assets cease to be associated with investment contracts. However, these provisions remain proposals and cannot take effect until the SEC adopts final rules.
Ripple Seeks Regulatory Certainty After SEC Battle
Ripple’s support follows its lengthy legal dispute with the SEC over XRP sales. Alderoty said the company’s previous litigation cost more than $150 million, highlighting the financial burden of regulatory uncertainty.
The company argues that clearer rules could reduce reliance on enforcement actions and encourage cryptocurrency businesses to operate in the United States. It also wants greater clarity around secondary-market transactions and regulatory filings.
For the broader cryptocurrency industry, the proposal could establish more predictable boundaries between securities transactions and ordinary token trading. Nevertheless, the final regulatory framework will depend on the SEC’s review of public comments and subsequent rulemaking decisions.
