Key Takeaways
- • Ripple filed a comment letter on October 20, 2026 supporting the SEC's proposed Regulation Crypto Assets, stating that "the SEC has clear authority to adopt it."
- • Chief Legal Officer Stuart Alderoty said Ripple spent more than $150 million over its legal battle with the SEC seeking regulatory clarity, arguing companies should not have to undergo such costly litigation to learn what the law requires.
- • The SEC's August proposal includes two exemptions for qualifying digital asset investment contracts: up to $5 million over four years for eligible startups, and offerings of up to $75 million within 12 months subject to added disclosure and reporting requirements.
- • Ripple argues a token is not automatically a security merely because it was sold under an investment contract, urging the Howey analysis focus on issuer promises and whether those commitments have ended rather than on decentralization.
- • A joint letter from Chainlink, Hedera, Stellar, Aptos, Avalanche and Cardano also seeks clearer rules, including recognition of digital commodities in the rule text.
Summary
Ripple is urging the U.S. Securities and Exchange Commission to finalize its proposed crypto rules, arguing that clear regulation is necessary to protect investors and retain crypto innovation in the United States. According to the report, Ripple filed a comment letter on October 20, 2026, supporting the SEC's proposed Regulation Crypto Assets. Chief Legal Officer Stuart Alderoty said the agency has clear authority to adopt the rules and that years of case-by-case enforcement have pushed crypto innovation overseas. Ripple wants rules that follow existing law and clearly define when a digital asset falls under securities law.
Alderoty stressed that a token is not automatically a security simply because it was sold through an investment contract. Under the Howey test, he argued, the focus should be on the promises made by the issuer and whether those commitments have ended, rather than on decentralization as the primary test. He added that clearer rules would help companies understand their legal obligations without facing lengthy court battles, and could attract investment and protect investors.
The push follows Ripple's protracted legal dispute with the SEC. Alderoty said the company spent more than $150 million seeking legal clarity, stating, "No company should have to do that to learn what the law requires."
The SEC introduced its proposed Regulation Crypto Assets in August and includes two possible exemptions for qualifying digital asset investment contracts. Under the proposal, eligible startups could raise up to $5 million over four years through one exemption, while another would permit offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements. The proposal also contains a safe harbor for determining when an issuer has fulfilled its original promises and a token is no longer linked to an investment contract. Ripple supports this approach but wants a more reliable process for exchanges, brokers and other market participants.
Ripple is not alone in its call. A group including Chainlink, Hedera, Stellar, Aptos, Avalanche and Cardano submitted a joint letter seeking clearer rules, including recognition of digital commodities in the rule text. The SEC is reviewing industry feedback; although the main comment period ended October 20, the regulator is expected to continue accepting comments as it considers changes ahead of a final commission vote.
Alderoty stressed that a token is not automatically a security simply because it was sold through an investment contract. Under the Howey test, he argued, the focus should be on the promises made by the issuer and whether those commitments have ended, rather than on decentralization as the primary test. He added that clearer rules would help companies understand their legal obligations without facing lengthy court battles, and could attract investment and protect investors.
The push follows Ripple's protracted legal dispute with the SEC. Alderoty said the company spent more than $150 million seeking legal clarity, stating, "No company should have to do that to learn what the law requires."
The SEC introduced its proposed Regulation Crypto Assets in August and includes two possible exemptions for qualifying digital asset investment contracts. Under the proposal, eligible startups could raise up to $5 million over four years through one exemption, while another would permit offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements. The proposal also contains a safe harbor for determining when an issuer has fulfilled its original promises and a token is no longer linked to an investment contract. Ripple supports this approach but wants a more reliable process for exchanges, brokers and other market participants.
Ripple is not alone in its call. A group including Chainlink, Hedera, Stellar, Aptos, Avalanche and Cardano submitted a joint letter seeking clearer rules, including recognition of digital commodities in the rule text. The SEC is reviewing industry feedback; although the main comment period ended October 20, the regulator is expected to continue accepting comments as it considers changes ahead of a final commission vote.
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