Ripple Backs SEC Regulation Crypto Assets, Urges Final Rule to End Uncertainty

Ripple has formally endorsed the U.S. Securities and Exchange Commission's proposed Regulation Crypto Assets, filing a detailed comment letter on October 20 that urges the agency to adopt the framework as a final rule. The submission came on the last day of the public comment period and was addressed to SEC Secretary Vanessa A. Countryman.

The move places Ripple, which spent years in court fighting the SEC over XRP sales, in the position of supporting the regulator's effort to write industry-wide rules. The company argues that clear regulations are needed to protect investors and keep innovation in the United States, and that formal rules would replace the case-by-case enforcement approach it blames for driving crypto businesses offshore.

Alderoty on Regulation Crypto Assets

Chief Legal Officer Stuart Alderoty said Ripple supports the proposal but stressed that the industry needs clear rules instead of years of case-by-case enforcement, according to CryptoRank. He confirmed the submission publicly in a post on X, formerly known as Twitter, where he referenced the company's legal expenses during its concluded SEC lawsuit.

Alderoty said the agency has clear authority to adopt the rules and called for a clearer approach to digital asset regulation. "We support the proposal, and the SEC has clear authority to adopt it," he said, according to CryptoRank.

He argued that the SEC's earlier reliance on individual enforcement actions created uncertainty, restricted legitimate businesses and pushed cryptocurrency innovation outside the United States, Crypto Adventure reported. In a post on X, Alderoty stated that Years of 'case by case, coin by coin' enforcement have pushed innovation offshore, according to NameCoinNews.

Tokens Versus Investment Contracts

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, NameCoinNews reported. The company maintains that issuing tokens through investment contracts does not automatically classify the underlying digital assets as securities.

Ripple said 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, according to NameCoinNews. Alderoty called the approach faithful to Howey, the 1946 Supreme Court case, CryptoPotato reported.

Ripple opposes making decentralization an independent requirement for determining when securities obligations have ended, according to kucoin. Instead, the company wants regulators to examine whether issuers have fulfilled or permanently withdrawn their original commitments to investors. What matters is what an issuer actually promised and when those promises end, not a subjective 'decentralized' test, Alderoty wrote, according to CryptoPotato.

The letter also rejects sorting tokens into "company-backed" and "network" camps, warning that the split would revive the "implicit" promise standard the SEC dropped in its 2026 interpretation, CryptoPotato reported. In one example cited in the letter, a company sending 5% of each sale to buy and burn its own token creates an investment contract because the code automates a promise to return revenue to holders.

What the Proposal Contains

The SEC released Regulation Crypto Assets on August 18, aiming to create a clearer framework for certain investment contracts involving digital assets. The proposal establishes two registration exemptions for qualifying investment contracts involving cryptocurrency.

One pathway would permit eligible startups to raise $5 million over four years without traditional securities registration. A second exemption would allow offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements. The larger exemption includes a $20 million Tier 1 pathway and a $75 million Tier 2 pathway, Crypto Adventure reported, and federal antifraud and antimanipulation provisions would continue to apply.

The proposal also includes a conditional safe harbor allowing a cryptocurrency to cease being associated with an investment contract once the issuer has completed or permanently ended its promised essential managerial efforts. Under a proposed Rule 400, an issuer could file a public Form TR certifying that the work it promised buyers is finished or abandoned, CryptoPotato reported.

Ripple supports the safe harbor but opposes an SEC suggestion to limit it to issuers that fulfilled their promises, arguing that buyers can no longer expect profits from abandoned work either, according to CryptoPotato. 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, NameCoinNews reported.

Refinements Ripple Wants

While backing the exemptions, Ripple proposed changes to how digital assets are classified, how investment contracts terminate and how secondary-market transactions are regulated. The company wants the SEC to clarify that cryptocurrency issuers do not automatically need to submit a Form TR to establish that an investment contract has ended, Crypto Adventure reported.

Ripple also recommends allowing exchanges, brokers and other intermediaries to rely on completed Form TR filings when determining whether an asset remains subject to securities requirements. Another proposed refinement would extend the safe harbor's treatment of crypto assets to the Investment Company Act and Investment Advisers Act, reducing inconsistent classifications across federal securities laws.

The company is seeking stronger protections for secondary-market transactions involving tokens separated from investment contracts, and it wants Rule 500 clarified to prevent ordinary cryptocurrency trading from inheriting obligations tied to earlier offerings, kucoin reported. Ripple also opposes excluding ordinary broker-dealer transactions from proposed state-registration preemption protections, warning that such restrictions could discourage regulated intermediaries from providing secondary-market liquidity.

On the question of authority, the letter points to Section 28 of the Securities Act and Section 36 of the Exchange Act, which let the SEC exempt class or classes of securities, CryptoPotato reported. Ripple maintains that the SEC can introduce tailored exemptions using its existing statutory authority without waiting for new congressional legislation, a position that follows the Senate's failure to advance the CLARITY Act in September.

Industry Letters and Litigation History

Ripple was not alone. A group of blockchain organizations including Chainlink Labs, the Cardano Foundation, Hedera, Ava Labs, the Stellar Development Foundation and Aptos Labs filed a joint comment letter urging the SEC to codify classifications for digital commodities, NameCoinNews reported. The coalition argued that clearer status would strengthen U.S. competitiveness and reduce legal ambiguity for networks already widely viewed as decentralized.

The Blockchain Association also endorsed the proposed framework on October 20 but requested changes to its fundraising restrictions, Crypto Adventure reported. The industry group wants the startup exemption increased from $5 million to $10 million, arguing that blockchain development, infrastructure and security expenses can exceed the proposed ceiling, and it recommends excluding qualifying airdrops and network participation rewards from fundraising limits.

Ripple's position follows the resolution of its own SEC litigation, which officially concluded in August 2025 when both parties agreed to dismiss their appeals, ending a case that began in December 2020 over XRP sales, kucoin reported. The resolution preserved a July 2023 federal court ruling distinguishing institutional XRP sales from certain secondary-market transactions, while Ripple remained subject to a $125 million civil penalty and an injunction over securities-registration violations.

Alderoty revealed that Ripple spent more than $150 million defending itself throughout the dispute, adding that "No company should have to do that to learn what the law requires," according to CryptoRank. Ripple maintains that formal regulations would provide greater stability than enforcement policies that future SEC leadership could reverse, kucoin reported.

Conclusion

Ripple's October 20 letter puts the company on record supporting Regulation Crypto Assets while pressing the SEC to refine how investment contracts end, how tokens are classified and how secondary-market trades are treated. The public comment period closed on October 20, though the SEC is accepting feedback beyond its formal deadline, according to The Cryptonomist. The framework remains a proposal, with no final adoption date or implementation schedule announced, and the agency must complete its regulatory review before adopting final rules.

Frequently Asked Questions

What did Ripple file with the SEC on October 20, 2026?

Ripple filed a roughly 20-page comment letter addressed to SEC Secretary Vanessa A. Countryman expressing full support for the proposed Regulation Crypto Assets and calling on the Commission to adopt it as a final rule. Chief Legal Officer Stuart Alderoty confirmed the submission publicly in a post on X.

What fundraising exemptions does Regulation Crypto Assets propose?

The proposal includes two registration exemptions for qualifying digital asset investment contracts. One pathway would let eligible startups raise $5 million over four years without traditional securities registration, while a second would permit offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements.

How much did Ripple spend on its SEC lawsuit over XRP?

Stuart Alderoty said Ripple spent more than $150 million defending itself in the litigation, which concluded in August 2025 when both parties dismissed their appeals. Ripple also remained subject to a $125 million civil penalty and an injunction over securities-registration violations.

Why does Ripple oppose a decentralization test for crypto assets?

Ripple argues decentralization should not be an independent requirement for determining when securities obligations end. The company wants regulators to assess whether an issuer has fulfilled or permanently ceased the essential managerial efforts promised to investors, consistent with the Supreme Court's Howey test.

Which crypto organizations joined the push for clearer SEC rules?

Chainlink Labs, the Cardano Foundation, Hedera, Ava Labs, the Stellar Development Foundation and Aptos Labs filed a joint comment letter urging the SEC to codify digital commodity classifications. The Blockchain Association separately endorsed the framework while asking that the startup exemption rise from $5 million to $10 million.