Ripple has formally endorsed the U.S. Securities and Exchange Commission's proposed Regulation Crypto Assets in a 20-page comment letter submitted on October 20, 2026. Chief Legal Officer Stuart Alderoty affirmed that the SEC holds clear authority to adopt the rules, which include fundraising exemptions up to $75 million annually and a safe harbor for tokens exiting security status. Following a $150 million legal battle over XRP sales, Ripple advocates evaluating investment contracts based on express issuer commitments rather than decentralization metrics.
Ripple's support for SEC regulatory authority
- ▪Ripple Chief Legal Officer Stuart Alderoty stated on October 20, 2026 that the SEC possesses clear legal authority to adopt the proposed Regulation Crypto Assets unveiled in August 2026
- ▪Ripple filed a 20-page comment letter on October 20, 2026 supporting the U.S. Securities and Exchange Commission's proposed Regulation Crypto Assets
Key features of the SEC proposal
- ▪The SEC's proposed Regulation Crypto Assets framework, unveiled in August 2026, includes a conditional safe harbor for digital assets that cease to be investment contracts
- ▪The SEC's proposed Regulation Crypto Assets from August 2026 includes registration exemptions allowing crypto projects to raise $5 million over four years or $75 million annually
Separating Crypto Assets from investment contracts
- ▪Ripple asked the SEC to ensure consistent treatment of separated crypto assets defined under the SEC's proposed Regulation Crypto Assets across the Securities Act, Exchange Act, Investment Company Act, and Investment Advisers Act
- ▪Ripple supported the SEC's proposed Regulation Crypto Assets approach allowing an investment contract to end once an issuer completes or permanently stops promised essential managerial activities
Decentralization legal tests
- ▪Ripple urged the SEC to reject decentralization as a separate legal test, stating metrics like governance participation, node distribution, software contributions, and economic control cannot reliably determine ongoing contractual obligations
- ▪Ripple asked the SEC to avoid introducing additional legal tests based on whether a cryptocurrency is associated with a company or an independent network
Secondary market trading protections
- ▪In its October 20, 2026 comment letter, Ripple requested clarification from the SEC regarding secondary-market transactions under proposed Rule 500
- ▪Ripple requested that trading intermediaries like exchanges and brokers be protected when relying on an issuer's properly filed Form TR
History of Ripple's lawsuit with the SEC
- ▪Ripple Chief Legal Officer Stuart Alderoty stated that Ripple spent over $150 million on legal fees during its multi-year SEC lawsuit over XRP sales
- ▪In July 2023, a federal judge ruled that XRP itself was not inherently an investment contract, prompting exchanges like Coinbase and Kraken to restore U.S. XRP trading
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