Ripple has submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) supporting clearer rules for crypto assets, arguing that regulatory uncertainty has already cost the industry millions. The letter, dated October 20, 2026, calls on the SEC to complete its draft of proposed regulations for crypto assets.
According to Ripple, current federal securities law provides a basis for regulating crypto assets but does not specifically state what qualifies an asset as a security. Under the proposal, investment contracts—rather than crypto assets themselves—would qualify as securities. This distinction could reduce uncertainty for assets issued after the time frame established by the contract expires.
Ripple Cites $150M in Legal Costs
Ripple argued that inconsistent enforcement has pushed innovation offshore, citing more than $150 million spent clarifying legal questions. The company has previously reported spending at least $150 million in fees related to determining how regulatory bodies view its products and services.
The final version of the SEC’s rules will ultimately decide whether any changes to the current regulatory environment will create long-term regulatory certainty.
SEC’s Proposed Fundraising Framework
The SEC’s proposed framework could make it easier for cryptocurrency startups to fundraise in the U.S. It offers two fundraising tiers for crypto projects that need more than the $5 million startup exemption allows.
- Tier 1 allows raises of up to $20 million per year.
- Tier 2 extends that amount to $75 million.
Issuers seeking to use either tier of exemptions must first get approval from the SEC and issue certain disclosures regarding token economics, governance, and development risk. Tier 2 issuers are also required to submit audited financials and therefore incur higher compliance costs. Furthermore, because U.S.-based eligibility is strict, non-U.S. entities may be excluded from using this exemption.
While raising money in foreign jurisdictions could be avoided by converting to a U.S. entity, some smaller projects may still face difficulty meeting all of the requirements.
Can Clearer Rules Reduce Enforcement Uncertainty?
Ripple’s push for regulatory clarity raises a broader question about whether clearer rules can restore confidence in U.S. crypto markets. The proposed framework could reduce legal uncertainty, which has made long-term planning costly for issuers. However, having clearer rules does not necessarily mean that companies will stop operating in other countries.
U.S.-based crypto venture capital funding was overwhelmingly dominated by domestic-based entities during Q2 2026. Venture capital funding for cryptocurrency-related startups totaled approximately $5.6 billion across 384 deals during the quarter, with domestically based entities receiving 73.5% of total capital invested.
Rising U.S. startup formation and domestic token issuance would signal progress, while continued offshore expansion could expose the framework’s limits.
Final Summary
Ripple backs the SEC’s proposed framework, which would clarify when crypto assets fall under securities laws. The SEC’s proposed fundraising exemption could attract crypto investment to the U.S., but strict compliance rules may limit adoption.
